Ups And Downs Of Output

The Index of Production fell by 3.6% in December 2009 compared with December 2008. The index for the whole of 2009 fell by 10.2% compared with 2008. Within the production industries the Index of Manufacturing for December 2009 fell by 1.9% year-on-year. The Index of Manufacturing for the whole of 2009 fell by 10.5% compared with 2008. The indices are seasonally adjusted. Month-on-month both the IoP and the IoM reported an increase for the third month in a row, of 0.5% and 0.9% respectively.

The Index of Production is produced by the Office for National Statistics and measures the volume of production of the manufacturing, mining and quarrying and energy supply industries and covers 23.1% of the UK economy as it was in the base year 2000. The Index of Manufacturing covers the 13 sub-sectors of manufacturing and the aggregate forms the manufacturing output time series.

In December output decreased in 9 of the 13 manufacturing sub-sectors and rose in 4 of them. The machinery and equipment industries reported the largest decreases and fell by 13.6% with the manufacturing of machinery for the production of mechanical power the largest contributor with a decrease of 22.6%. The paper, printing and publishing industries fell by 4.2% with the publishing of newspapers making the largest contribution with a fall of 8.1%. In the mining and quarrying sector, the oil and gas extraction sub-sector contributed a decrease of 9.9% to the overall sector fall of 12.1% in December 2009 compared with December 2008. Other mining and quarrying decreased by 35.3%. The energy, gas and water supply industries index fell by 6.6%.

In the main industrial groupings, consumer durables reported an increase of 0.1%. The other main groups reported falls. Consumer non-durables decreased by 1.3%, capital items by 0.8% and intermediate goods by 6.5%.

The Index of Production can be used on its own as a short term indicator as the Index covered 78.6% of the total IoP in the base year. It is usually the first indicator of economic activity and an important component of GDP and National Accounts.