British industrial production started the new year with rapid growth, but the downturn in the construction sector is deepening, suggesting that Britain’s economy continues to move slowly before Brexit. Britain become the slowest growing economy in G7 last year, as the Brexit vote has strained the cost of households and investment by companies.
The factory production, which was a bright light for the UK thanks to a strong global economy, expanded only 0.1% on a monthly basis in January after the 0.3% growth in December.
This is slightly below the consensus estimate of the economists, which showed an increase of 0.2%.
However, January marks the ninth consecutive month of growth of factory production on a monthly basis.
In general, however, the inertia slows down. During the three months until the end of January the production of the factories increased by 0.9%, which is the slowest rate since mid-2017.
However, construction output declined by 3.4% on a monthly basis in January, compared with a 1.6% growth in December. This is the largest decline since June 2012 and is below any forecast. The collapse is mainly due to a decline in housing construction – a disappointment for Finance Minister Philip Hammond, who wants to strengthen this sector.
Overall, the industrial output registered a 1.3% growth in the first month of the year against a 1.3% decline in December. The economists expected production to recover by 1.5% in the month.
The industrial production accounts for 14% of the UK’s total economic output.
The British economy expanded by 0.4% quarter on quarter over the three months to end December 2017, slowing slightly compared to the third quarter.