Manufacturing flat. Construction down. The latest data sits oddly with the upbeat surveys from business and the boom-boom Britain headlines.
So what’s going on? The first thing to note is that official figures can be volatile and that over the latest three months, a better guide to the trend, there was growth in both sectors.
But it is also the case that survey evidence from CIPS/Markit has consistently painted a rosier picture than that provided by the Office for National Statistics. The recent purchasing managers’ indices (PMIs) for construction, manufacturing and services would suggest that the economy expanded by more than 1% in the final three months of 2013. The flash estimate out later this month is likely to be close to the 0.8% growth recorded in the third quarter.
The unexpected weakness of manufacturing and construction output in November will be welcome news for the Bank of England. Threadneedle Street has no desire to start jacking up interest rates and can point to the latest figures as evidence that the recovery is a lot more fragile than it looks.
That is certainly the case. Despite a 2% rise over the past 12 months, manufacturing output is still nearly 10% down on where it was before the economy went into recession in early 2008. Construction has even more ground to make up. Output is down 15% on its pre-recession peak.
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