Wednesday, February 10, 2016

The latest data on industrial production show a dip, year on year, in output to December 2015. This amounts to -0.3% across all production industries, but the fall is particularly pronounced in manufacturing - at 1.8%. As observers of my forecaster of this series will know, this downturn has been on the cards for some time.

The latest forecast is reproduced below. It looks ahead 24 months, and suggests that the production industries will not recover quickly.

There are clearly many uncertainties facing the economy at present - these include the prospect of Brexit raised by the upcoming referendum on EU membership, but also weaknesses in the global economy with China, in particular, facing an unfamiliar problem of sluggish growth. In the UK, the (dominant) services sector has been growing at a steady pace for some time, but confidence there is showing some signs of fragility. While many will be hoping for a soft landing rather than a return to full blown recession, the signs are that a significant slowdown has already begun.