-UK Apr industry output -0.1% on mo, -0.8% on yr
--UK Apr manufacturing output -0.9% on mo, unch on yr
--UK Apr manufacturing output well below expectations
--UK Apr manufacturing monthly fall biggest since Aug 1997
--ONS: 0.7 pct pts of UK mfg fall on mo from optical, mobile sector
--UK Feb-Apr industry output -0.8% vs Nov-Jan; unch on yr
--UK Feb-Apr manufacturing output -1.1% vs Nov-Jan; +0.6% on yr
--UK Apr mining, quarrying output +3.5% on mo, -7.6% on yr
--UK Apr utilities output +3.0% on mo, -0.7% on yr
--ONS: UK mfg yrly trend estimate now -2.0% vs prev -0.5%
--ONS: UK industry yrly trend estimate now -2.5% vs prev -2.0%
--UK Mar industry output rev dn at -0.3%/mo, rev dn at unch/yr
--UK Mar mfg output rev dn at -0.4% on mo, rev dn at +0.3% on yr

London, June 7 (BridgeNews) - The global downturn in demand for mobile phones sent the U.K. manufacturing sector into its steepest monthly fall in April since 1997, according to figures published by the Office for National Statistics on Thursday. Manufacturing output dropped 0.9% on the previous month and was unchanged on the same period a year ago, well below expectations of a fall of around 0.2% on the month. The ONS said 0.7 percentage points of the fall was made up for by a collapse in the optical and networking equipment and mobile phones sector.
* * * Total industrial output in April fell 0.1% on the month and 0.8% on the year, compared with a revised fall of 0.3% on the month in March and broadly in line with expectations.
The worse-than-expected manufacturing results prompted the ONS to dramatically scale back its estimate of the annual trend rate of growth to a fall of 2.0% from 0.5% last month. The trend for total industrial output is for a fall of 2.5% on the year.
The figures illustrate how intensely difficult conditions have become for manufacturers in the light of weaker external demand. The ONS said respondents to its monthly survey, which forms the basis of these latest figures, had blamed weaker global demand for mobile phones for the steep drop in output.
"Due to the downturn in the industry as a whole, globally these are lower than they would have liked," an ONS spokeswoman said. The mobile phone sector itself plunged 22.4% on the month in April. The ONS said output in the first four months of this year had been much lower than the strong growth recorded throughout 1999 and 2000. There were also significant falls in other sectors, albeit not as spectacular. The biggest were in the textiles, leather and clothing sector and the rubber and plastic products sector.
Stronger-than-expected energy output helped steady the headline figure for total industrial output but was nowhere near enough to offset the manufacturing fall. Mining and quarrying output rose 3.5% on the month and electricity, gas and water output rose 3.0% on the month.
The following are economists immediate reactions to the data.

Mark Miller, economist at Morgan Stanley

"Obviously the manufacturing data was much weaker than expected. Industrial output was more in line with expectations but these data do suggest that the bad news from the manufacturing sector is not yet over even if the wider services sector is better supported. It would suggest some further easing from the Bank of England in the near term."

Philip Shaw, Economist at Investec

"The manufacturing numbers were not only worse than expected, they weren dire. It reinforces our belief that the sector is not just in recession but that it is suffering badly as a result of the slowdown in global demand and the strength of the pound against the euro."