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UK industry output barely rises in February, suggests slower Q1 growth

Friday, April 10, 2015 - 16:39
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British industrial output barely grew in February and the construction sector shrank, suggesting overall economic growth slowed in the first quarter, shortly before Britain is due to hold a national election.

[LONDON] British industrial output barely grew in February and the construction sector shrank, suggesting overall economic growth slowed in the first quarter, shortly before Britain is due to hold a national election.

Industrial output rose by a monthly 0.1 per cent, hurt by a sharp fall in oil and gas output, and it was below a forecast for a 0.3 per cent rise in a Reuters poll of economists, official data showed.

Construction output fell by a monthly 0.9 per cent in February, compared with forecasts for a rise of 2.0 per cent, the Office for National Statistics also said.

The numbers may complicate Prime Minister David Cameron's task of persuading voters that only his Conservative Party can be trusted with running the economy as he seeks a second term in the May 7 election.

Britain's economy grew by 2.8 per cent in 2014, the fastest growth rate of any of the world's big advanced economies.

But there had already been some signs that the pace of growth slowed in early 2015, including a contraction of Britain's dominant services sector in January.

A first reading of British gross domestic product in the first quarter of 2015 is due to be published nine days before the election.

Friday's data showed manufacturing output rose 0.4 per cent in monthly terms in February, in line with economists'forecasts, after falling 0.6 per cent in January when there was a plunge in information technology output.

Compared with a year earlier, overall industrial output was up 0.1 per cent and factory output was 1.1 per cent higher, both weaker readings than expected in the Reuters poll.

Output in Britain's North Sea oil and gas industry plunged 12 per cent in year-on-year terms in February, the biggest yearly fall since August 2013.

The ONS said it was unable to confirm whether the fall was due to the plunge in global oil prices.

Britain's energy ministry has previously said that the oil price fall could affect North Sea output in the first three months of 2015.

The ONS data on manufacturing have been weaker than private sector surveys. The Markit/CIPS purchasing managers index published last week showed manufacturing output in March was its strongest in eight months.

The ONS' industrial output data cover 14.6 per cent of the total British economy.

In the construction sector, which accounts for 6.4 per cent of the economy, housebuilding was down 1.2 per cent in monthly terms after dropping by 4.9 per cent in January, the steepest fall since February last year.

REUTERS