U.K. manufacturing output remains weak in Q1 2018, likely remained weak at start of Q2

Manufacturing in the U.K. continued to be disappointing in March, with output falling 0.1 percent sequentially. But the ONS claimed heavy snow that month had no visible effect. In the first quarter as a whole, output rose 0.2 percent, a fraction of the pace recorded in the earlier quarter because of a deceleration in both domestic and export orders.

In the meantime, energy production rose 2.5 percent in the first quarter, while it rose 2.6 percent sequentially in the month of March, mainly because of the below-average temperatures in late February and March. That permitted total industrial production to rise 0.1 percent sequentially in March and 0.6 percent in Q1. The latter is slightly weaker than the 0.7 percent assumption contained in the preliminary estimate of GDP.

But the official construction figures released today were less disappointing that the ONS projection. Taken together, the latest IP and construction figures might positively affect the initial GDP estimate by less than 0.1 percentage points and so the chances of revision would be dependent on the updated estimate of activity in the dominant services sector.

“More recent survey evidence from the PMIs and CBI suggests that manufacturing growth continued at an equally dismal pace at the start of Q2”, stated Daiwa Capital Market Research in a report. 

At 20:00 GMT the FxWirePro's Hourly Strength Index of British Pound was neutral at -45.0425, while the FxWirePro's Hourly Strength Index of US Dollar was neutral at 2.62384. For more details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex

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