UK Factory Output Sputters in December

        By Jon Sindreu and Jason Douglas
        LONDON--Output from British factories slowed in December, official figures said Tuesday, confirming the sector lost ground in the last quarter of 2014 and denting hopes of a bumper start to 2015.
        Manufacturing output rose 0.1% during the month, according to the Office for National Statistics, compared with a revised 0.8% increase in November. On an annual basis, it grew 2.4% compared with 3% in November.
        The broader measure of industrial production fell 0.2% on the month and grew only 0.5% on the year, the ONS said.
        Although British factories rode the wave of the British recovery in early 2014, their exports were hurt later in the year by the economic weakness of the eurozone--the U.K.'s main market overseas.
        Production industries managed to ramp up output by 1.4% in 2014 as a whole--which was the highest rise since 2010--but their output is still about 10% below what it was in their pre-recession peak in the first quarter of 2008, the ONS said.
        Weak exports also make the British economy overly reliant on domestic demand to fuel spending, which has been a concern for Treasury chief George Osborne. Mr. Osborne, the Chancellor of the Exchequer, pledged to double exports to about 1 trillion pounds ($1.5 trillion) by the end of the current parliament as a way to rebalance the economy, but sales of British companies abroad remain mostly flat three months ahead of the general election in May.
        The mining and quarrying industries had the largest decrease in output in December, according to official statistics, although no specific evidence pointed to the ultra-low price of oil in the international markets hurting the extraction industry in the North Sea, the ONS said. However, extraction of petroleum and natural gas dipped 3.1% on the month, the ONS said, due to longer-than-expected maintenance in a major oilfield in Huntington.
        The data points to a slow start to 2015 for British factories, although other indicators suggest the sector might bounce back in January. The manufacturing Purchasing Managers' Index, released last week by financial services company Markit Ltd, showed factories benefited from lower purchasing costs to increase their output at a faster pace.
        Write to Jon Sindreu at jon.sindreu@wsj.com and Jason Douglas at jason.douglas@wsj.com
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        February 10, 2015 04:39 ET (09:39 GMT)

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