Index of Production, UK: September 2019

Movements in the volume of production for the UK production industries: manufacturing, mining and quarrying, energy supply, and water and waste management. Figures are seasonally adjusted.

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This is an accredited national statistic.

Contact:
Email Mark Stephens

Release date:
11 November 2019

Next release:
10 December 2019

1. Main points

  • Total production output was flat at 0.0% for Quarter 3 (July to Sept) 2019, compared with Quarter 2 (Apr to June) 2019; manufacturing output was also flat at 0.0%, with falls in mining and quarrying (1.7%) and electricity and gas (0.7%), offset by a rise in water and waste (1.2%).

  • Negative contributions to quarterly growth by eight of the subsectors is almost wholly offset by notable strength from transport equipment (6.2%), mainly because of significant weakness during Quarter 2 2019, rather than notable strength during Quarter 3 2019.

  • Production output fell by 0.3% between August 2019 and September 2019; manufacturing provided the largest downward contribution (0.4%), followed by electricity and gas (0.5%).

  • The 0.4% monthly decrease in manufacturing output was widespread with falls in 8 of the 13 subsectors; the largest downward contribution came from a 5.1% fall in basic pharmaceutical products.

  • For Quarter 3 2019, production output decreased by 1.4% compared with Quarter 3 2018; led by a fall in manufacturing of 1.4% and supported by falls in mining and quarrying (5.3%) and electricity and gas (1.0%).

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2. Production

Total production output for Quarter 3 (July to Sept) 2019 remained flat at 0.0%, compared with Quarter 2 (Apr to June) 2019, which fell by 1.8%. The current quarterly growth was mainly because of manufacturing output remaining flat at 0.0%, with falls in mining and quarrying (1.7%) and electricity and gas (0.7%), partially offset by a rise in water and waste (1.2%).

Figure 2 shows that growth for the Index of Production (IoP) was more pronounced from the beginning of 2010, as the economy recovered, before a downturn during 2012. Production output in the UK remained 6.0% lower in Quarter 3 2019 than the pre-downturn peak for Quarter 1 (Jan to Mar) 2008.

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3. Manufacturing

Figure 3 shows that growth for the Index of Manufacturing was more pronounced from the beginning of 2010, as the economy recovered, before a downturn during 2012. Manufacturing output in the UK remained 3.2% lower in Quarter 3 (July to Sept) 2019 than the pre-downturn peak for Quarter 1 (Jan to Mar) 2008.

For further detail on the longer-term trend within manufacturing, please see the article Manufacturing sector performance, UK: 2008 to 2018, published on 2 April 2019. The article provides an overview of the changes in the manufacturing sector between 2008 and 2018, focusing on the industries that have grown or shrunk the most.

Total manufacturing output for Quarter 3 2019 remained flat at 0.0%, compared with Quarter 2 (Apr to June) 2019, which fell by 1.8%. In Quarter 3 2019, 8 of the 13 subsectors displayed negative contributions, led by:

  • machinery and equipment not elsewhere classified, which fell by 2.6%, mainly because of cumulative weakness from larger businesses

  • computer, electronic and optical products, which fell by 1.7%, again caused by cumulative weakness from larger businesses, especially during August 2019

Almost wholly offsetting the cumulative impact from the negative contributions was a notable rise of 6.2% in transport equipment. Strength here was led by motor vehicles, trailers and semi-trailers, which rose by 11.2%, the strongest quarterly growth since Quarter 4 (Oct to Dec) 2010, when it rose by 13.3%. The current quarterly growth was mainly because of significant weakness during Quarter 2 2019, which included a weak April 2019, rather than any notable strength during Quarter 3 2019. This industry is still reflecting a longer-term decline, as highlighted by the quarter on same quarter a year ago growth, which fell by 4.4%.

The decline of 0.4% in total manufacturing output in September 2019 compared with August 2019 was mainly because of widespread weakness, with 8 of the 13 subsectors falling. By far the largest downward contribution came from the pharmaceutical products subsector, which fell by 5.1%. Despite a sharp drop in the index, with two consecutive periods of monthly weakness, the index level was marginally stronger than in September 2018.

Elsewhere, smaller negative contributions from rubber and plastics products (1.0%), wood, paper and paper products (0.8%), chemicals and chemical products (0.7%) and other manufacturing and repair (0.5%) were partially offset by upward contributions from computer, electronic and optical products, and basic metals and metal products, which rose by 1.3% and 0.4% respectively.

In Quarter 3 2019 compared with Quarter 3 2018, output declined by 1.4%, the second consecutive fall. This was led by a 3.8% fall in transport equipment.

Other notable downward contributions came from machinery and equipment, which fell by 5.5%, a continuation of ongoing weakness since August 2018. Rubber and plastic products fell by 5.5% because of weakness from large businesses. Other manufacturing and repair fell by 3.9%, where a strong decrease of 22.5% from repair and maintenance of aircraft and spacecraft is a continuation of weakness since February 2018. Partially offsetting overall weakness was long-term strength from the pharmaceutical products subsector (8.5%).

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4. Mining and quarrying

There is significant weakness within this sector, reflected in the declines for both quarterly indicators for September 2019. These include periods of maintenance during July and August 2019, impacting on output for the oil and gas extraction industry, with quarterly output falling by 2.4% and quarter on same quarter a year ago output falling by 6.5%.

In contrast, sector monthly output increased by 1.8%, led by a rise of 2.2% from oil and gas extraction, recovering from weakness displayed during August 2019.

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5. Electricity and gas

There is widespread weakness across the sector, with a decline in output from all three indicators.

The quarterly decline of 0.7% for Quarter 3 (July to Sept) 2019 was driven by gas supply, which decreased by 2.8%. This fall was partially temperature-driven, with warmer than average temperatures across Quarter 3 reducing demand.

Monthly output fell by 0.5% to September 2019 because of reduced demand for both electricity and gas supply, which fell by 0.5% and 0.8% respectively.

For the quarter on same quarter a year ago, the fall in output of 1.0% was mainly because of electricity supply, which fell by 0.9%. This was supported by a fall of 1.4% from gas supply.

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6. Water and waste

Quarterly growth increased by 1.2% for Quarter 3 (July to Sept) 2019 mainly because of a general increase in output from water supply (2.2%). Waste collection rose by 1.7%, with evidence suggesting that work carried out on waste treatment projects is an underlying factor behind the strength across all three indicators for this industry.

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7. Production data

Index of Production time series
Dataset | Dataset ID: DIOP | Released 11 November 2019

Movements in the volume of production for the UK production industries: manufacturing, mining and quarrying, energy supply, and water and waste management. Figures are seasonally adjusted.

Output of the production industries
Dataset | Released 11 November 2019

Index values and growth rates for production, manufacturing and the main industrial groupings in the UK.

Index of Production and industry sectors to four decimal places
Dataset | Released 11 November 2019

Monthly index values for production and the main Index of Production sectors in the UK to four decimal places.

Monthly Business Survey turnover in production industries
Dataset | Released 11 November 2019

Monthly Business Survey production industries' total turnover, domestic sales and exports in the UK. Figures are in current price and non-seasonally adjusted.

Export proportions for manufacturing industries
Dataset | Released 11 November 2019

Monthly, quarterly and annual export data for the manufacturing industries, collected by the Monthly Business Survey at industry level in the UK.

All data related to the Index of Production are available on the Related data page.

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8. Glossary

Index number

A measure of the average level of prices, quantities or other measurable characteristics relative to their level for a defined time period or location.

Industrial classification or breakdown

This is the internationally standardised method for classifying the wide range of industrial sectors in an economy. We use the Standard Industrial Classification 2007: SIC 2007 for industrial breakdowns.

Manufacturing

The manufacturing sector includes the output of manufacturing industries and is broken down into 13 subsectors.

Monthly Business Survey

The Monthly Business Survey (MBS) collects information on the monthly turnover of UK businesses within the production and service sectors from various industrial sectors and regions in the UK.

Production

Production includes the output in the manufacturing (the largest component of production), mining and quarrying, energy supply, and water supply and waste management industries.

Turnover

The turnover of a company is the value of the goods or services sold during a particular time period. It includes total takings or invoiced sales and receipts. Interest and similar income, “other operating income” and extra ordinary income is excluded. Value Added Tax (VAT) invoiced to the customer is excluded.

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9. Measuring the data

The Index of Production (IoP) uses data from a variety of sources and is calculated by taking turnover and removing the impact of price changes, or by using direct volume estimates.

The majority of data are collected as “turnover values” through the Monthly Business Survey (MBS). In addition, direct volume series are collected by the Department for Business, Energy and Industrial Strategy (BEIS) and International Steel Statistics Bureau (ISSB) for steel industries.

From January 2018, Value Added Tax (VAT) data have also been included across 64 production industries for small and medium-sized businesses. For more information, see VAT turnover data in National Accounts: background and methodology.

A comprehensive list of the IoP source data can be found in the Gross domestic product (GDP(O)) source catalogue (XLS, 715KB).

More quality and methodology information on strengths, limitations, appropriate uses and how the data were created is available in the Index of Production QMI.

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10. Strengths and limitations

Seasonal adjustment

The data published in the Index of Production release are all seasonally adjusted (although non-seasonally adjusted estimates are also available). This aids interpretation by removing annually recurring fluctuations, for example, caused by holidays or other seasonal patterns.

Data volatility

Care should be taken when using the month-on-month growth rates as data can be volatile. Longer-term growth rates and examination of the time series allow for better interpretation of the statistics.

Comparability with UK trade statistics

The Monthly Business Survey (MBS) turnover in production industries dataset produces the proportion of turnover from exports by industry and level of turnover and exports (British pounds, millions). However, this is not always comparable with UK trade statistics. Further information on UK trade and how data on it are compiled can be found in the UK trade release.

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