Steel crisis heaps more gloom on UK manufacturingComments Off on Steel crisis heaps more gloom on UK manufacturing
Shuttered steel plants are weighing on the UK’s industrial performance after gloomy official figures showed the sharpest annual fall in factory output for almost three years.
The UK’s struggling manufacturers crawled ahead 0.1% in March, barely reversing a 0.9% decline in February. But output remained 1.9% below a year earlier — the worst since May 2013.
The plight of the UK’s steelmakers drowning under a flood of cheap Chinese steel has been thrown into sharp relief by the woes of Tata, which sold its Scunthorpe operation to Greybull Capital last month and is considering offers for the rest of its loss-making UK business.
But earlier blows such as the closure of the Redcar steel plant last autumn mean basic iron and steel manufacturing was down 37.3% on a year earlier in March.
The Office for National Statistics said the ailing sector had knocked 0.3 percentage points off annual industrial output.
Lee Hopley, chief economist at the EEF manufacturers’ organisation, said: “There isn’t too much in the data to lift economic spirits as a small increase in manufacturing output in March doesn’t change the picture of an overall weak start to the year.”
Number-crunchers’ original estimates of 0.4% growth for the wider economy are likely to remain unchanged by the figures, although this week has already seen dreadful trade figures. A raft of downbeat surveys also suggested that growth could slow to just 0.1% in the latest quarter.
Uncertainty over the Brexit referendum is hurting UK manufacturers but low oil prices have also torpedoed investment by players in the North Sea oil industry.
The Bank of England is expected to keep interest rates on hold at 0.5% when its monthly policy decision is announced tomorrow, along with its latest inflation report.