Manufacturing Production YoY

Manufacturing Production YoY compares UK factory output in 1 month with the same month 12 months earlier. It is the manufacturing section of the Index of Production (IoP) from the Office for National Statistics (ONS). It covers UK SIC 2007 sections B to E across England, Scotland, Wales and Northern Ireland.

It measures chained volumes as a proxy for gross value added (GVA, outputs minus inputs), with 2019 equal to 100. Positive % means expansion and negative % means contraction, not profits, jobs or exports. It tracks actual volumes only, not sentiment like the PMI purchasing-manager survey, cash sales, services, construction or farming. It is an accredited National Statistic, reviewed independently.

Businesses report turnover for the calendar reference month, with accounting-period returns date-adjusted to that month. Each bulletin appears about 6 weeks after the reference month at 7am UK time alongside GDP, services and construction.

Release dates are set 12 months ahead to match the monthly GDP estimate, with trade data published the same morning. Each release adds 1 new month and revises the prior month, with the survey open 13 months for late data.

Each bulletin shows 4 % changes including YoY, and revisions are often 0.0 to 0.1 points. The index feeds GDP as an early industry signal for Bank of England policy, with no buy or sell rule.

Annual factory growth reflects 13 manufacturing subsectors, with pharma often swinging the total.

• Food, beverages, tobacco, textiles, wood and paper: meat, dairy, bakery, drinks, tobacco, clothing, leather, wood, paper and printing.
• Coke, chemicals and pharmaceuticals: refining, industrial gases, petrochemicals, paints, detergents and medicines.
• Rubber, plastics and metals: rubber, glass, ceramics, cement, steel and fabricated metal goods.

• Electronics and electrical equipment: computers, optics, electronic parts and electrical fittings.
• Machinery and transport equipment: general machinery, motor vehicles, trailers, ships and aircraft.
• Other manufacturing and repair: furniture, other goods and repair and fitting of machines, ships and aircraft.

In the December 2019 bulletin production fell 0.8% in Q4 on Q3, with manufacturing down 1.1%. 11 of 13 parts fell, led by transport equipment down 1.9%. Yet December 2019 alone rose 0.1% on the prior month, with manufacturing up 0.3%.

Transport equipment rose 3.2%, with only 4 of 13 parts rising. Q4 fell 2.0% on Q4 2018, led by manufacturing down 2.5%. In the 12 months to December 2019 production fell 1.3% and manufacturing fell 1.5%. Chemicals fell 7.9%, machinery fell 8.9% and transport fell 3.4%, while metal products rose 2.6%, the largest annual fall since 2012.

1. Collect sales: Firms report turnover excluding VAT plus export share; energy, steel and VAT data add direct volumes.

1. Align and weight: Returns move to the reference month, and gaps use the prior reply times a growth factor.

Then design and calibration weights scale the sample to the population.

1. Deflate to volumes: Home sales use Producer Price Indices (PPI) and exports use Export Price Indices (EPI), blended by export share.

For example, £120.0m sales with 25% exports and indices of 112.0 and 108.0, blended to 111.0, give £108.1m in base-year prices.

1. Aggregate with annual weights: Industries combine with gross value added weights each year as a chained Laspeyres index.

Links use the October to December average, with 2019 equal to 100.

1. Adjust for seasons: Each industry uses X-13-ARIMA-SEATS, then adjusted series add to sector and total output.

1. Compute YoY % change: YoY growth equals 100 times (index in 1 month minus index 12 months earlier) divided by index 12 months earlier.

Positive % means expansion and negative % means contraction; 103.4 versus 105.0 a year earlier gives about -1.5%.