UK industry fell back into recession
as it shrank for the second quarter in a row, according to the Office
for National Statistics (ONS).
It is the third time UK industry has been in recession in eight years.
Although
industrial production rose 0.3% from February to March, it fell 0.4%
both in the first three months of 2016 and in the last three of 2015.
Compared with a year ago, manufacturing production in the first quarter fell 1.9%, the biggest fall since 2013.
The
biggest fall in output came from the basic iron and steel sector which
saw production drop in March by 37.3% percent compared with a year
earlier.
However, the oil and gas industries saw sharp gains,
increasing production 17% in February, and 10.9% in March from the same
months a year earlier.
Manufacturing and construction is proving
to be a drag on the whole economy, helping slow UK economic growth from
0.6% in the last three months of 2015 to 0.4% between January and
March, according to the ONS.
Weaker growth
Earlier
this month a survey by Markit/CIPS also showed manufacturing
contracting. Chris Williamson, chief economist at Markit said: "The
goods-producing sector therefore looks to be on course to act as a drag
on the economy again in the second quarter, contributing to a slowing in
economic growth to near-stagnation.
"Growth
could be even weaker if the surveys disappoint in coming month, which
seems probable given the intensifying uncertainty over the outcome of
the EU referendum."
Despite this, economist Ruth Miller from Capital Economics is optimistic for the rest of the year.
She
said: "We still expect things to look up as the year progresses.
Sterling's recent depreciation and our expectations that global growth
will pick up slightly in 2016 should allow the sector to return to
modest growth later this year."
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