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Bloomberg
UK manufacturing output fell the most in almost 17 years in April as the boost from Brexit stockpiling evaporated and car producers went ahead with planned shutdowns.
The 3.9 percent decline, the most since June 2002, saw the economy as a whole shrink for a second straight month, Office for National Statistics figures show. Vehicle production plunged by a quarter.
GDP fell 0.4 percent, the biggest monthly drop since March 2016, leaving the economy at risk of a sharp slowdown this quarter. Growth in the latest three months was a weaker-than-forecast 0.3 percent, down from 0.5 percent in the first quarter. The pound dropped after the figures were published, and was 0.4 percent lower at $1.2688 in London.
Factories boomed in the early months of 2019 as companies stockpiled goods to avoid supply disruptions ahead of the original March 29 deadline to leave the European Union. But with Brexit now
delayed until October, orders are being scaled back and demand met from products piled up in warehouses.
In a further blow to the sector, auto makers including BMW and Peugeot brought forward planned shutdowns from the summer in case there were Brexit disruptions. Vehicle output slumped 24 percent, the most since records began in 1995, though economists expect the loss to be partially recovered in May. There was also widespread weakness in other sectors, led by pharmaceuticals, metals and chemicals.
The figures highlight the fragility of the economic outlook as Brexit uncertainty continues. The weakening backdrop comes as the Conservative Party prepares to pick a new leader, with the leading candidates to succeed Theresa May insisting that a no-deal Brexit — the scenario businesses fear most — should remain on the table. Construction and the dominant services industry failed to provide any support in April, and PMI data last week suggest the economy saw little if any improvement in May.