WEAK industrial output figures and a sharp fall in construction yesterday added to fears that the UK economy slipped back into the red in the closing months of 2012.
Official data showed industrial production grew by a slower-than-expected 0.3 per cent in November, despite a strong rebound in oil and gas extraction that was due to the completion of maintenance work on the vast Buzzard North Sea oil field. Analysts had been expecting growth of 0.8 per cent.
Manufacturing output fell 0.3 per cent on the month – less than a 1.3 per cent decline seen in October, but also overturning forecasts for a monthly rise of 0.5 per cent.
Separate construction figures revealed a 3.4 per cent fall on the month in output and a 9.8 per cent annual drop – undermining hopes of a rebound in the sector.
The numbers add to a recent flow of disappointing economic data, stoking concerns of a fresh contraction in gross domestic product (GDP) in the fourth quarter of 2012, possibly extending into the opening three months of 2013.
Chris Williamson, chief economist at Markit, said: “There are signs that the situation in manufacturing improved in December but a deteriorating trend in the far larger services sector and forecasts of heavy snow for January have raised the possibility that the economy could contract in the first quarter, meaning the country slid into a triple-dip recession.”
The British Chambers of Commerce said the sluggish industrial data pointed to stagnation in the final quarter of 2012.
Chief economist David Kern added: “The figures will reinforce the concern that the Office for National Statistics will announce later this month a small decline in GDP, and this could be damaging to business confidence.”
