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ONS Figures Show Manufacturing Pick Up in September

When it comes to indicators of manufacturing progress, there are two names we look out for. The first, Markit, announced last week that UK manufacturing grew during the month of September at a steady clip. The other is the Office for National Statistics, who often weigh in slightly later than Markit.

Now, we’ve heard from that latter organisation, and their comments on the British manufacturing industry make for very interesting reading indeed. Headlining their findings is the news that output from manufacturers rose by 0.6% last month, up from the 0.2% we saw in August and the -0.9% witnessed in July, immediately after the Brexit vote.

Drugs makers and factories carrying out repairs were the strongest areas of growth, however total industrial production dropped by 0.4% in September after steep falls in the oil and gas sector which drove down the numbers. Though that news isn’t as bad as you might think, with the ONS pegging “widespread summer maintenance shutdowns” as the issue behind the drop in oil and gas production.

Kate Davis, ONS statistician said:  "There are no obvious signs so far of either the weaker pound or post-referendum uncertainties affecting the output of UK factories, which continued broadly in line with recent trends."

So far the referendum has had a mixed effect on manufacturing, with more overseas orders coming in thanks to the lowered cost of British goods but higher costs of buying from abroad meaning only certain businesses have benefitted from the falling pound. For ourselves, that’s meant greater exports of our JIC fittings and SAE adapters, but increased cost of purchasing steel.

Despite the positive news, Q3 2016 was down 0.9% for manufacturing from the same period last year.

Another blow to the manufacturing sector has come from US pharma giants Pfizer, who have announced that they’re to close two of their three UK manufacturing sites by 2020, potentially leaving 370 people out of work.

The company have said that the decision was “in no way related” to the UK’s vote to leave the European Union in June this year and commended the “excellent work” of the employees at both locations. Instead, the company have said that the decision was reached after a consultation regarding their worldwide operations, which will also see their headquarters moved for the first time in 50 years.

Pfizer aren’t the only pharma company planning on leaving the UK, however, with biosimilar specialist Hospira set to clear down following Pfizer’s $15bn purchase last year. Its packing and distribution site in Hampshire is also set to close, with the majority of job losses expected to happen there.

Drug production is an oft-ignored by irreplaceable part of the UK’s manufacturing industry that, alongside car production, has kept manufacturing in the UK afloat for a long while. The government will be keen to keep drug companies on side during the transition away from the EU, and we’ll be keeping a close eye on any policy decisions they make.

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