UK Manufacturing Output , June & 2nd Quarter 2023:  The Office for National Statistics (ONS) released the June output data this morning – this showed manufacturing output growing by +2.4% compared to May.  That month had seen output fall marginally and it seems most likely that this was caused by the extra bank holiday for the Coronation which is not accounted for the in the seasonal adjustment (because it is a one-off);  in turn, at least part of the growth in June (the strongest monthly growth since November 2020) was the recovery from that loss of a day’s activity.

We prefer to focus on the 3-month trends as this smooths some of the monthly volatility and, conveniently this month, this matches the calendar quarters.  Total manufacturing output in the 2nd quarter of 2023 was +1.6% higher than in the previous quarter and +0.8% above the level of a year earlier;  output in the sector in the latest quarter was 105.9% of its pre-pandemic level.

The fastest growing sub-sector in the latest data is capital goods where output was +3.8% higher than in the 1st period of this year and +5.8% higher than a year ago – it is 104.7% of its pre-pandemic level.

In turn, this growth is being led by the automotive industry where output increased by +14.0% on the previous quarter and was +13.7% higher than a year ago (Q2-22).  This comes as the sector works through the order backlogs that built up during most of 2021 and 2022 due to the global shortage of electronic components;  this industry also illustrates the impact of the extra bank holiday on the manufacturing sector as there was strong month-on-month growth in April and June but a flat trend for May.

The other industries that we monitor have been more muted but generally positive.  Output of the metal products sector was +2.3% up on the 1st quarter of 2023 and +2.7% higher than a year ago but was only 91.3% of its pre-pandemic level.  Aerospace output grew by +1.7% and +2.3% respectively  although in this industry, the Q2-23 level of output is at 118.2% of its pre-pandemic level.

The exception to the positive trends is the machinery industry where output fell by -0.1% compared to Q1 and was -2.9% down on a year earlier.  However, thanks to a very strong initial recovery from the pandemic, the latest output figure is still 109.6% of its pre-pandemic level.

You can download the ONS Statistical Bulletin from their web-site at (11 August) or request it from MTA;  we also have an analysis of the key industries which is available to members – please contact Geoff Noon ([email protected]) if you would like these charts.

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