An anticipated slowdown in the UK resulted in output in the manufacturing and construction industries falling back in January, according to official figures released by the Office for National Statistics (ONS) on Friday.Simultaneously, a report on the retailing industry said high-street sales had dropped to their lowest February figure since 2009, not only because of Brexit gloom but because of poor weather.But there was better news from the transport industry, with both Heathrow and Gatwick airports reporting sharp increases last month in both passenger and cargo numbers.

Fall in construction expected

The ONS report showed that a 1.8 per cent increase in construction output in December turned into a 0.4 per cent decline in January, though the fall was expected. Manufacturing output declined by 0.9 per cent, mainly as a result of a sharp fall in the ‘highly erratic’ pharmaceuticals industry, said the ONS.Even so, the UK’s trade deficit in goods and services remained at £2 billion in January, the same as it was the previous month.Kate Davies, ONS senior statistician, said, “Taking the last three months together, construction and manufacturing both grew strongly, with considerable narrowing in Britain’s trade deficit.“However, both manufacturing and construction were broadly flat on the month with the trade balance little changed.“Construction orders fell back a little overall in the second half of 2016, albeit after strong growth in the first half of the year.”

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Storm Doris affects high-street sales

Meanwhile, retailers saw like-for-like sales drop 2.2 per cent in February, the third month in a row of negative growth, according to the latest BDO High Street Sales Tracker. The poor performance on the high street was affected by Storm Doris, which caused widespread disruption across the UK.But Sophie Michael, head of retail and wholesale at BDO, said the figures also highlighted the pressures building on consumers’ discretionary spending.“The Chancellor told us growth in the economy was expected to be higher, and borrowing lower, than forecast in November, but that hasn’t translated into consumer spending power,” she said.“February saw a perfect storm, both figuratively and literally. Doris kept shoppers away from the high street, but the relatively poor growth of online sales in February shows that the economic headwinds significantly curbed spending.“The majority of retailers’ price hedges ran out at the end of last year, and inflationary cost pressures have forced them to increase prices, sharply in some cases.“Whilst these cost headwinds are a cause for concern, retailers need to find ways to ride out the storm and look to opportunities relevant to their business, such as exports or international expansion.“At the same time, the Chancellor’s decision in the Budget to spend £435 million minimising the impact of business rates will also be welcomed.”

Airport passenger numbers take off

However, there was no problem with expansion at major UK airports in February. Heathrow logged 5.27 million passengers during the month, a 1.7 per cent rise on February last year. Gatwick saw a 9.9 per cent year-on-year rise to three million passengers with long-haul routes growing by a fifth.John Holland-Kaye, Heathrow chief executive, said, “Heathrow is off to a flying start in 2017. We’re delivering the best service of any major airport in Europe to record numbers of passengers and boosting British exports with record cargo volumes.”Outside London, Manchester Airport recorded an 11.1 per cent rise to 1.66 million passengers in February, prompting Charlie Cornish, chief executive of Manchester Airports Group, to claim the figures showed the need for the government to improve transport links across the North of England.He said, “Manchester Airport is continuing to show its importance in providing global connectivity to a wider and wider segment of the country. No other airport outside of London can come close to offering the range of global destinations that we offer from our two runways.“Now is the time for government to start making concrete plans to improve access to the airport for the whole of the North. Businesses to the east and the west, particularly in key northern cities such as Liverpool, Leeds, Bradford and Hull, would benefit from more rapid and convenient rail links to a globally connected airport.”

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