Despite economists predicting a more positive month, UK manufacturing output declined by 0.7 percent, 0.6 more than expected. The manufacturing sector had been one of the leading components of driving the economic recovery following the initial recession back in 2010 and the start of 2011; but the deteriorating situation within the Eurozone, a major source of trade for the UK, would appear to have taken its toll, leading some analysts to speculate things are likely to get worse before they begin to get better.
However, Lee Hopley, Chief Economist for the EEF, one of the biggest organisations supporting UK manufacturing, stated that the situation isn’t as dire as reported:
“What we’ve got at the moment is different surveys and indicators all pointing in different directions. I think given the amount of uncertainty and turmoil going on in our major market, it’s not surprising that order flows are quite lumpy and volatile, you’re not going to find one data point that’s going to give you the full picture.”
Hopley went on to comment that though some sectors, such as the pharmaceutical industry, had declined, aerospace and mechanical equipment industries are performing considerably better.
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On the other side of the world, earlier fears surrounding China that an inflated yen could cause domestic manufacturing to relocate facilities overseas appear to have been avoided, with data showing that machinery orders rose by almost 6 percent during April.
A spokesman for the Tokyo-based Fujitsu Research Institute, said:
“The machinery orders are an early indicator of how the economy is doing, giving us a hint of investment trends. Strong orders indicate that reconstruction demand is kicking in, which is a good sign as domestic economy is going to be key to overall growth this year.”