The UK manufacturing sector was the largest contributor to production output in June 2023, which in turn was the largest contributor to GDP growth, according to the latest ONS figures.
The UK economy grew by a modest 0.5 per cent in June 2023, following a fall of 0.1 per cent in May. The largest contributor to GDP growth was production output, which grew by 1.8 per cent in June, having previously fallen by 0.6 per cent in May. June’s production output growth was the strongest seen since August 2020, when it grew 1.9 per cent.
The largest contributor to the production output growth witnessed was manufacturing output, which grew 2.4 per cent in June, the strongest growth since November 2020, when it grew 2.5 per cent. In fact, the manufacturing sector recorded growth in 11 of its 13 subsectors, with basic pharmaceutical products and pharmaceutical preparations the largest contributors to manufacturing growth, growing 7.9 per cent in June. Transport equipment also saw notable manufacturing growth of 4.8 per cent in June, with the manufacture of motor vehicles, trailers and semi-trailers the largest contributor to this division, growing 8.5 per cent in June.
Overall, production output grew 0.7 per cent in Quarter 2 2023, compared with Quarter 1, with growth of 1.6 per cent in manufacturing being the largest positive contributor to growth in production output during the period.
Meanwhile, the total value of UK goods exports increased by £0.6bn in June 2023, representing 1.8 per cent growth, attributed mainly to a rise in exports to non-EU countries. Exports to the EU remained stable. The trade in goods deficit narrowed by £4.6bn to £51.3bn in Quarter 2 2023.
Commenting on these new trade figures, Marco Forgione, Director General of the Institute of Export and International Trade, said: “Today’s statistics demonstrate the positive impact that international trade can have on the economy. But clearly more work still needs to be done to support businesses in achieving sustainable, long-term growth. It is encouraging to see a slight uptick in manufacturing exports in June with an increase in machinery and transport contributing to this rise.
“Today’s numbers illustrate how exporting can be a catalyst for recovery and new opportunities. It is good to see signs that UK firms are looking to create new opportunities further afield. There has been a notable increase in firms exporting to the likes of Argentina, Canada, Malaysia and New Zealand in the second quarter of this year.
“It is vital that we get more businesses trading internationally and for the UK to be seen as an attractive option for inward investment, if we are to tackle the cost-of-living crisis and to produce real economic growth.
“Now is the time for businesses to be exploring how they can grow and succeed through international trade. The Institute of Export & International Trade is here to support and advise firms who have not exported before, or those who want to expand their horizons.”