British pipeline outage puts drain on economy

Britain's industrial output plunged in December and the trade deficit widened following a shutdown of a major North Sea oil pipeline, official data showed on Friday. Industrial production dived 1.3 percent compared with activity in November, the Office for National Statistics said in a statement. That was the largest decline since 2012 and was worse than market expectations of a 0.9-percent drop. It also followed a 0.3-percent increase in November, the ONS said.
"Mining and quarrying provided the only downward contribution, falling by 19.1 percent as a result of the shutdown of the Forties oil pipeline for a large part of December," the statistics office added. However, manufacturing output, which excludes mining and quarrying, electricity, gas and water supply, grew by 0.3 percent.
The Forties pipeline system, which normally carries 40 percent of UK oil and gas production in the North Sea, was offline for three weeks. Over the whole year, industrial production expanded by 2.1 percent compared with 2016. That was the strongest increase since 2010 when it grew 3.2 percent. Manufacturing output meanwhile gained 2.8 percent during 2017.
Separately, the ONS also revealed Friday that Britain's deficit in goods and services - the gap between exports and imports - widened by £3.8 billion ($5.3 billion, 4.3 billion euros) to £10.8 billion in the three months to December. A drop in Britain's oil exports - as well as large increases in the price of fuel imports - had the largest impact on the trade in goods deficit, which widened by £3.3 billion in the same period to £37.2 billion.
The trade surplus in services narrowed by £0.5 billion to £26.4 billion. The Forties pipeline, owned by oil group Ineos, transports around 450,000 barrels of crude oil per day. Its temporary closure came after a routine inspection found a hairline crack in the pipe just south of Aberdeen in Scotland, prompting emergency repairs that stopped oil and gas from platforms feeding into the system.