By Claire West

Commenting on the manufacturing figures for October published yesterday by the ONS, David Kern, Chief Economist at the British Chambers of Commerce (BCC), said:

“These figures are better than expected, and provide welcome confirmation that the recovery in manufacturing is gathering momentum. We believe that this will ensure that GDP growth remains positive in the fourth quarter of 2010, albeit at a slower pace than in the third quarter.

With manufacturing output now expanding faster than services and total GDP for four consecutive quarters, we may at last be seeing the much-needed rebalancing of the economy. Though the wider industrial output figures recorded a surprising decline, this is mainly down to a seasonal sharp decline in mining and oil and gas extraction.

“There are still many risks ahead such as worrying developments in the Eurozone, and the adverse initial impact of the fiscal austerity measures that will be implemented during 2011. It is therefore crucial to support a manufacturing recovery by helping companies retain valuable skills, ensuring that UK exporters are not at a disadvantage when it comes to trade finance or expanding their premises, and by reviewing regulatory impediments to job creation. Delivering a Year for Growth in 2011 will require a strong contribution from manufacturers in all parts of the UK.”

The figures come ahead of the publication of the BCC’s comprehensive review of the manufacturing sector and an anticipated Government framework for the sector. The BCC report, “Manufacturing for export: Make or break for the British economy”, calls for the UK to back manufacturing companies as engines of growth for 2011, in particular by encouraging export activity.