LONDON: British industry enjoyed its strongest annual growth in over three years in April, in a further sign that the country’s rapid economic expansion is becoming less reliant on consumer demand.
Industrial output grew 3 percent, beating forecasts to record its biggest annual rise since January 2011, and in the three months to April it achieved its fastest pace of growth since June 2010, official data showed yesterday.
Britain’s economy as a whole kept up last year’s strong momentum in the first part of this year, and following the industrial output data, academic researchers estimated that gross domestic product had finally exceeded its pre-crisis peak.
The recovery is showing signs of broadening out from its earlier reliance on consumer demand and housing-related sectors.
That will be reassuring for policymakers who worry about the sustainability of a recovery led by consumers enjoying record low interest rates and a sharp rebound in house prices.
“The official and survey data ... help to dispel the notion that the recovery is based purely on consumer credit and the housing market, but is instead being fuelled to a large extent by booming factories and industry,” said Chris Williamson, chief economist at Markit. “This so-called ‘rebalancing’ means the recovery is looking increasingly sustainable.”
Both industrial output and its main manufacturing component grew by 0.4 percent in April — in line with forecasts — and manufacturing output was 4.4 percent higher than a year earlier, the fastest expansion since February 2011. The Office for National Statistics said industrial output would have shown even greater annual growth had it not been for an unusually warm April.
The weather contributed to an 11.5 percent decline in electricity and gas output in April, which knocked around 1 percentage point off the annual industrial output growth rate.
“Unless output stagnates or falls back over the remaining months of the second quarter, the sector should make its biggest contribution to quarterly GDP growth in four years in Q2,” said Samuel Tombs, UK economist at Capital Economics.
Economic output finally exceeded its pre-recession peak in May, the National Institute of Economic and Social Research said yesterday, reaching a milestone long passed by the United States and Germany. Reuters
