Release Explanation: Measures the total value of the output from mines, industrial factories and utilities is in the Industrial read. The value of manufactured goods is in the Manufacturing read. The Shipment number covers the amount sent abroad. “High production numbers usually denote an economy in an upwards trend, or growth period. These reports are reactive to change and are well respected.” TheLFB-Forex.com Trade Desk said.
TheLFB-Forex.com Trade Desk Thoughts: The U.K. manufacturing output decreased in February by 0.9%, compared with analyst expectations of -1.4%. From one year ago, manufacturing production fell by 13.8%, the biggest yearly drop since 1981.
Output decreased in eight of the 13 sub-sectors and increased in five sub-sectors during the latest month. The most significant decreases in output were 3.7% in the transport equipment industries, 1.6% in the basic metals and metal products industries and 3.7% in the other non-metallic mineral product industries. There were no significant increases during the month.
A different report showed that industrial production dropped by 1.0%, less than the forecasted number. From one year ago, industrial output decreased by 12.5%.
TheLFB-Forex.com Trade Team stated that the “declines are in-line with the overall trend of the U.K. economy, and should not come as a surprise. Even though the numbers were better than expected, manufacturing output has contracted for 12 straight months”. The Trade Team also noted that the three months to February, the manufacturing read dropped 6.5%, the biggest decline since records first began, in 1968.
Forex Technical Reaction: The pound fell 30 pips during the release. Previously, the pair struggled to break free from the range established during the overnight session, but until now, has not succeeded.