Monthly production output dips in May

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Total production output is estimated to have increased by 2.1% in May 2015 compared with May 2014, according to the latest index of production (IoP) from the Office for National Statistics (ONS).

There were increases in three of the four main sectors, with the largest contribution coming from mining & quarrying, which increased by 7.3%.

Manufacturing output increased by 1% in May 2015 compared with May 2014. The largest contribution to the increase came from the manufacture of transport equipment, which increased by 11%, due to a rise in the manufacture of air and spacecraft and related machinery.

However, manufacturing output decreased by 0.6% in May 2015 compared with April 2015. The largest contribution to the decrease in manufacturing came from basic metals and metal products, which decreased by 3.7%.

In the three months to May 2015, production and manufacturing were 9.2% and 4.6% respectively below their figures reached in the pre-downturn gross domestic product (GDP) peak in Quarter 1 (January to March) 2008.

Lee Hopley (pictured), chief economist at the EEF, said: "Despite a rebound in oil and gas extraction, the boost was not timely enough to trickle down the manufacturing supply chain where sectors supplying to the North Sea saw big losses in output. While output shrank on the month, however, it is up on the year, driven by robust growth in other transport and pharmaceutical sectors."

She added: " Looking forward, manufacturers in the oil and gas supply chain should also see demand pick up as capital expenditure in the North Sea resumes, which could provide light in the end of the tunnel for manufacturing as a whole."

The IoP measures output in the manufacturing (the largest component of production), mining and quarrying, supply and water supply, and waste management industries.