7:33 AM, Feb 10, 2017 — Monthly UK industrial production and construction output rose by more than expected in December as Britain’s economy proved to be more robust than projected following the nation’s surprise vote to leave the European Union (EU) last year.
Industrial production rose by 1.1% in December from November, according to data published by the Office for National Statistics (ONS) on Friday. This beat expectations for a 0.2% monthly gain from economists in an investing.com survey but was below the 2% monthly gain reported in November, which was the fastest monthly increase since April 2016.
The increase, which includes oil and gas extraction, was attributed to gains in manufacturing, especially pharmaceuticals which increased by 8.3% from the previous month, and basic metals, where output rose by 4.5%, the ONS said. The statistics office added that output by drugmakers is “highly erratic”.
Manufacturing production, which strips out oil and gas production, increased by 2.1%, beating the average estimate of economists for a 0.5% increase, according to investing.com. It was also up from a 1.4% monthly increase in November.
From a year earlier, industrial output was up by 4.3% while manufacturing was 4% higher, the ONS data showed.
The UK economy has held up better than anticipated by most economists since the nation’s June vote to withdraw from the EU. The Bank of England (BOE) had expected gross domestic product to barely grow in the second half of last year when it cut rates to a record low 0.25% in August. In fact, the UK economy expanded by 0.6% in the final quarter of last year, the same pace as in the previous two quarters, data from the ONS subsequently showed.
The BOE left its monetary policy and benchmark interest rate unchanged earlier in the month while sharply upgrading its forecast for economic growth in 2017, raising it to 2% from a previous projection made in November for 1.4%.
In a separate report, the ONS said on Friday that construction output in the UK rose by 1.8% in December from November, when it gained 0.4% on the month. Economists in an investing.com survey predicted a 1% increase. From a year earlier construction work increased 0.6%, beating economists’ expectations for a 0.5% decline.