8 June 2006, 13:15  UK manufacturing suffers worst month since October 2005 in April

The UK manufacturing sector suffered an unexpected setback in April after enjoying its best performance in 11 months the previous month, official figures showed today. The office for National Statistics revealed that manufacturing output fell a seasonally-adjusted 0.2 pct in April from the previous month, against an unrevised 0.7 pct rise in March and expectations of a 0.3 pct increase. The April decline was the weakest performance since October 2005's 0.7 pct fall and stands in marked contrast to a raft of surveys indicating that the beleaguered sector is enjoying a marked improvement in fortunes. The statistics office said there were no significant rises within manufacturing during April. The main decline was registered by the paper, printing and publishing industries, which saw a 1.3 pct fall in output. On a year-on-year basis, NS said there was a 0.5 pct rise in April, lower than expectations of a 0.7 pct rise. In March, output was 1.6 pct higher on the previous year, higher than the 1.1 pct previously estimated. A spokesman for the statistics office said seasonal adjustments related to the timing of Easter was the main reason behind the upward revision. Meanwhile, the wider industrial production measure, which also includes mining, quarrying and utilities as well as oil and gas output, fell by a seasonally-adjusted 0.6 pct in April from the previous month, against predictions for a 0.4 pct increase. In March, it rose an unrevised 0.7 pct. On a year-on-year basis, industrial production, which accounts for around 20 pct of UK GDP, was 1.0 pct lower, against forecasts of an unchanged reading. In March, the annual rate was 0.7 higher, up on the previous forecast of 0.3 pct. Again, seasonal adjustment revisions to do with Easter prompted the upward revision. On a three monthly basis up to May, manufacturing output rose 0.6 pct from the previous three months and industrial output by 0.2 pct. Compared with the same three months a year ago, manufacturing output was 0.2 pct higher while industrial output was 0.7 pct lower. Today's data has been made available to the Bank of England's rate-setting Monetary Policy Committee, which is expected to keep its key repo rate unchanged at 4.50 pct when it concludes its monthly meeting at noon today.

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