After four months of falling output in the manufacturing sector September finally saw a rise, even if slight. Over the previous four months, Britain’s manufacturing output had been down by 0.3% but with a .2% increase for the month of September there is some small amount of hope.
Unfortunately, the rise in manufacturing does not offset the fact that overall output in the industrial sector is still at a standstill with oil, mining and gas remaining unchanged. The Office for National Statistics believes that this small increase will not have a significant impact on the GDP. In fact they believe it will be negligible.
Throughout all this, the BoE is still looking to increase asset purchases to boost the economy with a total layout of £275 billion. This is an expansion of the programme that was rolled out last month in response to the debt crisis in Europe. Although Paul Fisher, markets director of BoE, believes that the economy will be stagnant in this final quarter of 2011, there is a high probability that the UK will still face another recession. His odds are at 50%.
The tiny rise in September’s manufacturing output does not assuage the fact that manufacturing is still struggling dramatically in light of international and domestic financial conditions. This is according to HIS Global Insight’s London chief economist, Howard Archer.
Every day the news, if not worse, seems to be unchanged and as a result there is growing concern that a double dip recession is just around the corner and could be announced even before the coming new year. In all 13 categories in the manufacturing sector, 5 fell, 2 remained unchanged and 6 rose just a bit. The end result is that manufacturing gained 2% for the year but overall industrial output is down .7%.
What this portends is yet to be seen, but market analysts are in agreement that it does appear the UK, indeed the world, is headed for a new recession.
