U.K. industrial production growth exceeded economists' expectations at the end of 2016, underpinned by manufacturing, and the trade deficit narrowed as a weak pound boosted exports.
Industrial output climbed 1.1 percent month-on-month in December, much faster than the expected 0.2 percent increase and 2 percent growth seen in November, figures from the Office for National Statistics revealed Friday.
Likewise, manufacturing output expanded 2.1 percent compared to the 0.5 percent growth economists had forecast and November's 1.4 percent increase. Pharmaceuticals provided the largest contribution to growth, rising by 8.3 percent.
On a yearly basis, industrial and manufacturing output gained more-than-expected by 4.3 percent and 4 percent, respectively. Economists had forecast industrial output to grow 3.2 percent and manufacturing to rise 1.7 percent.
In 2016, industrial production expanded 1.2 percent with the largest contribution from manufacturing, which grew 0.7 percent.
Production advanced 0.3 percent in the fourth quarter instead of flat growth estimated previously.
Another report from the ONS showed that construction output expanded 0.2 percent in the fourth quarter, revised up from 0.1 percent estimated while calculating preliminary GDP data.
In December, construction output grew 1.8 percent from November, largely due to an increase in new work. Year-on-year, construction output increased 0.6 percent, with the main contribution from new housing work.
Separately, the ONS said the country's visible trade deficit narrowed to GBP 10.9 billion in December.
At the same time, the total trade deficit declined to GBP 3.304 billion from GBP 3.559 billion in November. The statistical office attributed the narrowing mainly to an increase in exports of goods to non-EU countries of GBP 1.1 billion.
Both exports and imports were at record highs. There remains little evidence that the weaker pound has had an effect on the trade balance, ONS statistician Kate Davis said.
Today's economic activity data added to other evidence suggesting that the economy maintained a significant amount of momentum at the end of 2016 and implies that GDP growth is becoming more balanced, Scott Bowman, a U.K. economist at Capital Economics, said.
by RTT Staff Writer
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