Manufacturing figures hit 12-month high as construction industry struggles

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Output in Britain's manufacturing industry grew at its fastest pace for a year in July, but the construction industry slumped and the trade gap failed to improve.

Figures from the Office for National Statistics (ONS) showed the manufacturing sector outstripped expectations to climb by 0.5% in July, driven in part by the production of new cars.

It came as the manufacturing of motor vehicles, trailers and semi trailers raced ahead during the period, expanding at the fastest rate since March 2009 at 13.7%.

However, Britain's deficit in goods and services, the gap between exports and imports, was static at £2.9 billion in July, while construction output sank for the fourth month in a row at 0.9% in response to 1.4% drop in new work.

Kate Davies, ONS senior statistician, said: "Manufacturing remains relatively subdued since the start of the year, though July showed the first significant monthly growth of 2017, with car production increasing partly thanks to new models rolling off the production lines.

"The usual period of summer maintenance of North Sea oil platforms also failed to materialise for a second month running.

"Construction output fell for the fourth month in a row, with private housing-building contracting in July after a strong couple of months.

Photo of a house being built
Homes being built as the Office for National Statistics releases its latest construction figures (PA)

"The trade deficit was little changed in the three months to July with an increase in imported goods partially offset by an increase in exports of services.

"Exports of goods to the EU increased but this was offset by falling goods exports to the rest of the world."

Sterling was up 0.3% to 1.313 against the US dollar following the announcement, while the pound was marginally off versus the euro at 1.088