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UK manufacturing enjoys strong quarter UK GDP 'close to pre-crisis level' says NIESR
(about 1 hour later)
UK manufacturing output grew by 1.4% in the first quarter of the year, the strongest quarterly pace since 2010, Office for National Statistics (ONS) figures show. The UK economy is close to regaining its pre-financial crisis level of economic activity, according to research organisation NIESR.
The UK economy was just 0.17 per cent below its pre-recession peak at the end of April, it said.
Meanwhile, official statistics point to continued economic growth in the UK.
Manufacturing output grew by 1.4% in the first quarter of the year, the strongest quarterly pace since 2010, ONS figures show.
NIESR said it expected GDP to regain its first quarter 2008 level within a short time scale.
"It can reasonably be expected that the peak will be regained within the next month or so," NIESR said.
Separately, NIESR upgraded its growth forecast for the UK economy to 2.9% in 2014.
It increased its growth estimate for 2015 to 2.4% from 2.1%, and sees growth remaining at about 2.4% for the following two years.
Factory output grows
Figures from the Office for National Statistics (ONS) on Thursday show the UK economy continues to grow.
UK manufacturing output grew by 1.4% in the first quarter of the year, the strongest quarterly pace since 2010.
In the construction sector construction output grew by 0.6% from the previous quarter.In the construction sector construction output grew by 0.6% from the previous quarter.
The ONS also said that the UK trade deficit fell to £1.3bn in March.The ONS also said that the UK trade deficit fell to £1.3bn in March.
Separately, research organisation NIESR upgraded its growth forecast for the UK economy to 2.9% in 2014.
This was up from its previous estimate of 2.4%.This was up from its previous estimate of 2.4%.
NIESR also increased its growth estimate for 2015 to 2.4% from 2.1%, and sees growth remaining at about 2.4% for the following two years.
'March of the makers''March of the makers'
The better-than-expected rise in manufacturing output was mainly driven by rubber and plastics, which grew by 7.3%.The better-than-expected rise in manufacturing output was mainly driven by rubber and plastics, which grew by 7.3%.
Food, beverages and tobacco, and machinery and equipment also drove growth. The largest downward pressure came from pharmaceuticals, which fell by 5.8%.Food, beverages and tobacco, and machinery and equipment also drove growth. The largest downward pressure came from pharmaceuticals, which fell by 5.8%.
The wider measure of industrial production increased by 0.7% in the quarter.The wider measure of industrial production increased by 0.7% in the quarter.
Martin Beck, senior economic adviser to the EY ITEM Club, said: "The 'march of the makers' continues."Martin Beck, senior economic adviser to the EY ITEM Club, said: "The 'march of the makers' continues."
He noted that given recent upbeat manufacturing surveys in April, the second quarter of the year seemed "set fair for further strong growth in the manufacturing sector".He noted that given recent upbeat manufacturing surveys in April, the second quarter of the year seemed "set fair for further strong growth in the manufacturing sector".
The fall in March's trade deficit was driven by a rise in exports, with exports of goods up 4.9% from the month before while imports of goods rose 2.8%.The fall in March's trade deficit was driven by a rise in exports, with exports of goods up 4.9% from the month before while imports of goods rose 2.8%.
However, David Kern, chief economist at the British Chambers of Commerce noted that while the monthly figure had seen a big improvement, the trade deficit for the first quarter of 2014 had narrowed only slightly compared with the previous quarter. However, David Kern, chief economist at the British Chambers of Commerce noted that while the monthly figure had seen a big improvement, the trade deficit for the first quarter of 2014 had narrowed only slightly compared with the previous quarter.
"While there are signs of a small improvement in the UK's international trade performance over time, the pace of change is still painfully slow," Mr Kern said."While there are signs of a small improvement in the UK's international trade performance over time, the pace of change is still painfully slow," Mr Kern said.
Nevertheless, the ONS figures suggest that the health of the economy is improving, BNP Paribas UK economist David Tinsley, told the BBC.Nevertheless, the ONS figures suggest that the health of the economy is improving, BNP Paribas UK economist David Tinsley, told the BBC.
"The quarterly figures for industrial production, particularly manufacturing, suggest the economic upswing is continuing, if not accelerating," Mr Tinsley said."The quarterly figures for industrial production, particularly manufacturing, suggest the economic upswing is continuing, if not accelerating," Mr Tinsley said.
"This is a recovery not just based on the consumer. Manufacturing is powering ahead too.""This is a recovery not just based on the consumer. Manufacturing is powering ahead too."
The economy may grow as much as 3% this year, Mr Tinley added.The economy may grow as much as 3% this year, Mr Tinley added.
His prediction is line with NIESR's upgraded forecast.
The organisation said that it expected GDP to regain its first quarter 2008 pre-recession peak "within the next month or so".
In March, the British Chambers of Commerce said that in the second quarter of the year it expected GDP to exceed the level seen at the start of 2008.In March, the British Chambers of Commerce said that in the second quarter of the year it expected GDP to exceed the level seen at the start of 2008.