Oil pipeline shutdown hits United Kingdom industry but manufacturing and construction grow

BRITAIN-HOUSING-PROPERTY-CONSTRUCTION

BRITAIN-HOUSING-PROPERTY-CONSTRUCTION

Industrial output decreased 1.3 percent month-on-month in December, which was the first fall in nine months.

Construction also showed an increase in December.

United Kingdom construction output also showed a surprise surge in December, according to official data published today.

Falling exports and rising imports drove Britain's trade deficit higher in December, thanks partially to the rise in oil prices, the Office for National Statistics reported on Friday.

Export volumes fell 0.6% quarter on quarter, while imports rose by 1.7%.

The ONS said Britain's manufacturing sector saw output rise by 0.3 percent on the month, this being the eighth consecutive month of growth.

While today's figures showed the hit was bigger than thought, the pipeline is back online so a corresponding rebound in production looks likely in January.

This data is unlikely to change the analysis conducted by Bank of England (BoE) officials who on Thursday upgraded their growth forecasts for Britain mainly due to the improving global economy.

On a three month basis, United Kingdom goods imports were up 0.3 per cent and exports up 2.9 per cent, leaving the trade balance at £37.2bn.


The Bank of England also said that United Kingdom interest rates were likely to need to rise sooner than it had thought past year.

This marked the eighth consecutive month of growth in the sector - the longest such run in almost 30 years.

ONS senior statistician Ole Black said: "Manufacturing continued to grow strongly in the last three months of the year, with metal goods and pharmaceuticals driving growth". The ONS commented saying the industrial and construction data did not alter the estimate.

On trade, the ONS said goods imports exports rose 1.5 per cent in December to £29bn while imports were up 3.8 per cent at £41.5, leaving the overall balance at £13.6bn, the highest since September 2016.

Economists polled by Reuters had expected a smaller shortfall of £11.6 billion.

A routine inspection found a hairline crack in the pipe south of Aberdeen, prompting emergency repairs that stopped the flow of oil and gas from platforms feeding into the system for nearly a fortnight, pushing oil prices above $67 a barrel - then its highest since 2015.

Separately, the ONS said construction output jumped 1.6% on the month.

"The positives were ongoing marked strength in manufacturing output and a welcome pick-up in construction output - although this was not enough to prevent clear contraction over the fourth quarter".

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