Reacting to today's publication by the Office for National Statistics (ONS) of Industrial and Manufacturing Output figures for January 2006, David Kern, Economic Adviser to the British Chambers of Commerce (BCC), said:

"Today's manufacturing output figures show a modest rise between December and January. But earlier figures have been revised down again and the sector remains in negative territory both in quarterly and annual terms. Manufacturing weaknesses reinforce our view that the authorities must act forcefully to support the sector. In line with most analysts, we did not expect a repo rate cut today, but we urge the MPC to consider early action. Alleviating the plight of manufacturing, and countering the threat of rising UK unemployment, remain key priorities.

"Manufacturing output rose 0.2% in January, sustaining the very modest improvement seen in the previous two months. But further downward revisions to earlier figures show that the sector's performance has been worse than previously thought. In 2005 as a whole, manufacturing output fell by 1.1%, while the previous official estimate signalled a full-year fall of only 0.8%. 

"In the three months November-January, manufacturing output recorded a 0.2% fall over the previous three months, and a very large 2.1% decline over the same three months a year ago. Manufacturing output recorded outright falls in three out of the last five years. In volume terms, output is now some 4% below its 2000 level.”

David Kern concluded: "Today's figures confirm the slightly more positive tone shown in the BCC's last QES, but do not signal a sustained recovery. The Chancellor must use next month's Budget to remove the threat of further tax increases on business. We also believe that we need an early interest rate cut in the near future."