Figures released today show a bounce back of 0.7% in manufacturing for November after a slump in the previous month. The increase in the IoM comes to wipe out the unexpected 0.7% drop in October. Over the year, manufacturing output has increased by 2.7%, being the only one of the four main production sectors to have grown.
Indeed, the increase of 1.1% in the IoP compared to a year ago was completely down to growth in manufacturing. Between October and November the IoP actually fell for the second consecutive month by 0.1%. Mining and quarrying was the biggest downward contributor deteriorating by 3.7% from October.
Food and drink sector leads the way
There was growth in seven out of the thirteen manufacturing subsectors over the past year. Consistent with the weak global demand environment most of the growth came from sectors catering to the domestic market. The largest contributor was the food and drink sector which added 0.73 percentage points to manufacturing growth from November 2013. The sector is one of the least export-intensive with only about 3.4% to 12.6% of its output across a range of different products going to overseas markets.
Still, despite discouraging external demand conditions, the export of manufactured products grew for a third consecutive month in November. This has given a boost to the production of electronics and chemicals which have posted strong performance over the past year contributing 0.26 and 0.14 percentage points to manufacturing growth respectively. The largest negative contribution has come from pharmaceuticals at -0.24 as the sector has struggled with patent cliff in 2014 (see Lee’s blog).