RTTNews - UK manufacturing output unexpectedly recorded an increase in June, which was also the biggest growth since January 2008. Industrial production increased at the fastest pace since October 2007 indicating a possible end to recession.

Wednesday, the Office for National Statistics said in a report that manufacturing output grew 0.4% in June from May, while economists were looking for a 0.1% monthly fall after a 0.6% decrease in May.

Output increased in nine of the 13 sub-sectors and decreased in three sub-sectors with one sub-sector remaining flat during June. Transport equipment industries reported a significant rise of 4.1%, while electrical and optical equipment industries production climbed 2.5%. By contrast, chemical and man-made fibres industries showed a 3.6% drop in output.

At the same time, industrial production grew at the fastest pace since October 2007. Total production grew 0.5% between May and June, reversing a 0.7% fall in May. This was better than a zero percent expected for June. Mining and quarrying output grew 1.1% and energy supply output remained flat.

On a yearly basis, industrial production recorded a decrease of 11.1%, smaller than the 12% fall in May. Manufacturing output slid 11.7% in June compared to a 12.7% decrease in May. Economists were looking for an annual 11.4% drop in industrial production and a 12.1% decline in manufacturing.

In the second quarter, total production slipped 0.6% sequentially taking the annual fall to 11.8%. Among various sectors, mining and quarrying output was down 0.7% and output of energy supply decreased 3.7%. Manufacturing output dropped 0.2% quarterly and was 12.5% lower than the same period of 2008.

Motor vehicle production slid 42.8% in the second quarter from the last year. But, it was up 10.1% over the previous quarter.

Chief Economist at the British Chambers of Commerce, David Kern said better-than-expected manufacturing figures confirm positive features in the economy, but any improvement remains fragile. There is no room for complacency and efforts should be made to nurture signs of improvement, and to bolster confidence.

Elsewhere, a survey showed that the British service sector was robust for three consecutive months. The Purchasing Manager's Index stood at a seventeen-month high of 53.2 in July, a survey from the Markit Economics and the Chartered Institute of Purchasing & Supply revealed. Growth in July was supported by a combination of increased referrals, greater marketing and higher levels of incoming new business.

By the end of July, Business Secretary Lord Mandelson had announced a GBP 151.5 million package to help manufacturers seize the opportunities provided by emerging technologies. The funding is expected to expand manufacturers' access to information, encourage to take up new technologies and address specific challenges faced by the aerospace sector.

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