Manufacturing output disappoints in May

Subscribe to Campaigning blog feeds


Today we got a look at how manufacturing activity fared over May. We’ve picked out our key takeaways from today’s data.

1) Manufacturing output surprisingly contracts

Manufacturing output contracted by 0.2% between April and May, cancelling out its rise in April, while in the three months to May output was down 1.1%.



2) What’s behind the figures?

The month on month fall largely reflects a contraction in the transport equipment (-2.3%), and food and drink (-2.0%) sectors. Within the transport equipment sector, automotive had a particularly weak month, with output falling by 4.4%, its largest fall since February 2016. This tallies with recent industry data, which has seen UK car sales down for the third consecutive month in June. Food and drink, the largest manufacturing sector also had a weak month, with inflation and wage growth dynamics likely hitting what is a consumer facing sector. Still, this shouldn’t be sustained, given the demand inelastic nature of the sector's products.

Meanwhile, the contraction in output for the three months to May was almost exclusively down to the highly erratic pharmaceutical sector, which fell by a hefty 7.2%.



3) Should we be worried?

There’s no getting away from it that these are a disappointing set of figures, especially given that we had been expecting an increase of between 0.25%-0.5% this month. The weak data does cast some doubt on the hope of a bounce back in overall production activity ahead of the first estimate of GDP, out later this month, as well as add to the feeling some have of a weakening economy.

Still, it should be noted that manufacturing output was up 0.4% this month compared to the same month a year ago, and this week’s manufacturing PMI, although falling, remained healthy. Our own Manufacturing Outlook also points to a sector in good health. It therefore is possible we may see a reversal in the weakness in the coming months…here’s hoping anyway.



This person has now left EEF. Please contact us on 0808 168 1874 or email us at if you have any questions.

Other articles from this author >
industrial-strategy-has-landed Industrial Strategy

EEF has long called for the creation of an industrial strategy and now that one is here we are determined to make it a success for the sector.

Read more >
BigData The 4th industrial revolution

Manufacturing is undergoing a transformation that will see greater emphasis on developing new and existing skills to boost productivity for the future

Read more>
Week ahead 10th December

10 Dec 2018

A look at the key data releases in the week ahead.

Online payments are not supported by your browser. Please choose an alternative browser or make payments through the 'Other payment options' on step 3.