British economic growth spurred by strong manufacturing figures

LONDON, Jan. 10 (Xinhua) -- Official data on Wednesday showed that the British manufacturing sector is growing at its fastest pace since the onset of the financial crisis in 2008.

The data from the Office of National Statistics (ONS), showed that industrial production grew by 0.4 percent month on month in November, the seventh consecutive month of growth and the strongest period of expansion since 1987.

Manufacturing output also rose by 0.4 percent over the month, and energy production, rose 3.2 percent over the month and reversed a sharp drop seen in October as more seasonal colder weather stimulated growth.

On a three-month basis, total industrial production rose by 1.2 percent over three months, maintaining the high rate of growth from Q3, which puts it on track to make a significant positive contribution to GDP growth in Q4.

Good global economic conditions are a strong stimulus, with Britain's largest export market the eurozone growing robustly.

"As the manufacturing sector is relatively outward-looking, producing around 45 percent of exports despite accounting for just 10 percent of British employment, manufacturers have been significantly helped by a buoyant global economy and the weakened pound in recent quarters," according to Christian Jaccarini, economist at the Center for Economic and Business Research (CEBR), an independent economic think-tank in London.

"The eurozone, which accounts for almost half of UK exports, is performing strongly and economic forecasters are unambiguously optimistic about its prospects moving forward," Jaccarini told Xinhua on Wednesday afternoon.

The British economy has also been stimulated by a devaluation in sterling since the Brexit referendum vote in June 2016 and is now also benefiting from strong global growth, reflected in expansion in the eurozone, the main British export market.

ONS data on trade also released on Wednesday showed the trade deficit widened to a five-month high in November from 2.3 billion pounds (about 3.11 billion U.S. dollars) in October to 2.8 billion pounds in as total imports rose by 1.6 percent a full one percentage point above export growth.

However, goods export volumes, excluding oil and erratics, rose by 2.6 percent on the previous quarter's figures over the three months to the end of November, while imports were flat, suggesting that net trade could boost GDP growth in Q4, after providing no contribution to growth in Q3.

Jaccarini said the stronger showing of manufacturing represented a change in emphasis on drivers of economic growth.

"Today's releases show the balance of UK output is shifting slightly from services to manufacturing."

He added: "Although the UK has undoubtedly suffered in the wake of the Brexit referendum vote, with the sterling depreciation driving up inflation, it has not done as badly as many anticipated."

"With the agreement of a transitional (Brexit) deal looking highly likely and recent service sector order book data picking up in December, there is hope for a surprise on the upside." (One pound = 1.35 U.S. dollars) Enditem