Reacting to today's publication by the Office for National Statistics (ONS) of Industrial and Manufacturing Output figures for September 2005, David Kern, Economic Adviser to the British Chambers of Commerce (BCC), said:

"Today's  manufacturing output figures were again disappointing, and worse than the markets expected. Manufacturing output fell 0.3% in September, after falling 0.2%  in August. Because the July figure was revised up, output grew by 0.4% quarter-on-quarter in Q3, in line with the recent provisional GDP estimate. Today's figures confirm that manufacturing output fell in both Q1 and Q2 2005, and the sector was in technical recession in the first half of 2005.  Manufacturing output shows a Q3 decline in year-on-year terms, and the sector is persistently failing to sustain a meaningful recovery. 

"Total industrial production, (which includes, in addition to manufacturing, mining, utilities, and oil and gas extraction) fell particularly sharply in Q3, by 0.6% quarter-on-quarter, and by 1.3% year-on-year. Today's figures reinforce our view that the threat of renewed manufacturing recession is very real. The BCC's economic forecast signals negative growth in manufacturing output for 2005 as a whole, even if we assume a gradual improvement from now onwards."

David Kern concluded: "The manufacturing sector's acute underlying weaknesses reinforce our view that the Government must act firmly and rapidly to remove the threat of further tax increases on business. We also believe that we will need further interest rate cuts in the near future. The financial markets do not expect a further interest rate cut on Thursday, although we hope that the MPC will feel able to act, either this week or very shortly. As well as expecting the MPC to maintain a flexible stance, we wish to see firm action from the Government to support manufacturing."