Free Trial

MNI DATA ANALYSIS: Jan Construction Plunges, Mfg growth Slows>

-UK Jan Construction -3.4% m/m; -3.9% y/y 
-UK Jan Manufacturing +0.1% m/m; +2.7% y/y 
-UK Jan IoP +1.3% m/m; +1.6% y/y 
     By Laurie Laird and Jamie Satchithanantham 
     London (MNI) - UK short term indicators suggested a weak start to 
2018, with construction activity plunging and manufacturing output 
rising by its smallest margin in nine months. 
     Total production rose by 1.3% between December and January, or by 
1.6% over the same period of last year, boosted by a jump in oil and gas 
production. That falls short of the median MNI forecast of a 1.5% 
monthly increase and a 2.5% annual gain. 
     Oil and gas production surged by 32.3% in the first month of the 
year, the biggest rise since records began in 1995, reversing a record 
24.2% plunge in December. 
     That follows the re-opening of the Forties Pipeline in the North 
Sea on December 30, following a three-week shutdown that dampened energy 
output in the final month of last year. Oil and gas production added 
1.65 percentage points to total output. 
     But the manufacturing sector expanded by a more sluggish pace, 
rising by just 0.1% in January, or by 2.7% over the same period a year 
earlier, compared to the MNI median forecast of a 0.2% monthly 
improvement and a 2.8% annual gain. 
     That's the smallest increase since April of 2017, but the ninth 
consecutive monthly rise, the longest stretch of gains since records 
began in early 1968. 
     Output of transport equipment rose by 1.9% in January, adding 0.21 
percentage points to total production, while a 2.8% drop in metals 
production countered that upward influence. 
     The Society of Motor Manufacturers and Traders reported no material 
change in car output in the year to January, with a 1.5% increase in the 
production of cars for export largely balancing a 6.0% drop in output 
for the domestic market. 
     However, the Office for National Statistics includes the production 
of vans and other vehicles in its estimate of auto production, and also 
uses a different set of seasonal adjustment factors, explaining the 
discrepancy with the SMMT data. 
     Over the fourth quarter of 2017, industrial production rose by 
0.5%, confirming the outturn contained in the second estimate of gross 
domestic product released late last month. Industrial output, which 
comprises 14.0% of the economy, added 0.1 percentage point to total 
growth of 0.4%. 
     Meanwhile, construction output plunged by 3.4% in January, falling 
by 3.9% over the first month of 2017, compared to the MNI median 
forecast of a 0.5% contraction on both a monthly and annual basis. 
That's the biggest fall since June of 2012 when output was down by 4.4%. 
     A National Statistics official refused to be drawn on whether the 
collapse of outsourcing firm Carillion contributed to the fall in 
construction output, noting only that housebuilding, which is not an area 
in which Carillion operated, accounted for much of the January weakness.
     Private housebuilding fell by 8.3% between December and January, 
while new public housing plunged by 12.9%, after a strong December.  
     Construction output over the fourth quarter of 2017 declined by 
0.7%, in line with the estimate included in the latest release of GDP. 
Construction comprises 6.1% of total output. 
-London bureau: 44 (0) 203 865 3812; email:

To read the full story



MNI is the leading provider

of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.

Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.