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LONDON — British manufacturers experienced in November one of their worst months since the mid 1980s as export markets dried up, firms went bust and domestic demand was reined in, official figures showed Friday.
The Office for National Statistics said manufacturing output, which accounts for around 15 percent of Britain's gross domestic product, fell a massive 2.9 percent in November from the month before.
That was the sharpest drop in 23 years, barring unique circumstances in June 2002, when output fell 5.4 percent after the nation was given two public holidays to celebrate the Queen's 50 years on the throne.
Excluding that, November's fall was the biggest since July 1985's 4.0 percent decline, when British manufacturing was still reeling from the wider deindustrialization of the economy.
The statistics office said the wider measure of industrial production, which also includes energy and mining and accounts for nearly a fifth of total British output, fell 2.3 percent in November.
The data suggests the recent depreciation of the pound — which typically makes British products cheaper and more competitive on global markets — was not enough to compensate for the drop in demand caused by the global economic crisis.
One bright spot for manufacturers has been the continuing easing in price pressures as oil and commodity costs fell in recent months amid waning global demand.
In a separate release, the statistics office said manufacturers' raw material costs — also known as input prices — fell 2 percent in December from the month before. That was the third consecutive monthly decline and halved the annual rate of increase to 4.3 percent.
Meanwhile, output prices — commonly known as factory gate inflation — were unchanged in December. Though that was the first time since July they haven't decreased, it did push the annual rate of increase down to 4.7 percent from 5.1 percent in the previous month.
However, analysts were surprised by how modest the fall in output prices was, given the sharp falls in production.
"Looking ahead, the surveys suggest that manufacturing output is likely to continue to plunge from here, despite the lower pound," said Paul Dales, analyst at Capital Economics. "It can't be long before this forces firms to reduce their selling prices significantly. It's not a good time to be in industry."
