U.K. manufacturing output jumped 0.7% in 2nd quarter

Index of Manufacturing, 2003=100

Manufacturing output in the United Kingdom increased 0.7 percent in the second quarter of 2007 compared with the first quarter, with increases in 12 out of the 13 subsectors and a decrease in one sub-sector. This is accoording to data released August 6 by Britain's Office for National Statistics.

There were widespread increases in output in the quarter with significant increases of 2.6 percent in the transport equipment industries and 1.5 percent in the paper, printing and publishing industries. There were no significant decreases in manufacturing during the latest quarter.

Overall production output increased by 0.6 percent in the second quarter of 2007. There was an increase in output of 0.8 percent in the mining and quarrying sector, but output in the energy supply sector remained broadly unchanged. Oil extraction output continued to increase with a major new oil field expanding production during the quarter. Gas extraction output also increased in the second quarter with stronger demand for gas due to cooler average temperatures than last year and a lower wholesale gas price.

Additionally, new gas pipelines from Norway and mainland Europe were closed for routine maintenance during May and into June, reducing imports of gas to the U.K. and leading to increased gas extraction volumes to meet demand.

Between May and June manufacturing output increased by 0.2 percent. Output rose in seven of the 13 subsectors and fell in six subsectors. There were no significant increases on the month, but the largest non-significant increase was in the transport equipment industries where output increased by 1.0 percent. There were no significant decreases in output.

The overall Index of Production increased by 0.1 percent between May and June. Mining and quarrying output decreased by 1.1 percent but energy supply output increased by 1.1 per cent. Within energy supply the output of the gas supply industry increased by 6.0 percent.

Average June temperatures this year were nearly 1 degree Celsius cooler than June 2006, leading to an increased demand for gas which was further increased by the falling wholesale gas price making gas more cost efficient for electricity generation.