Thursday, February 09, 2012

Britain's Mining Bust

Whereas, as I have mentioned in several posts, the mining (including oil extraction) sector is booming at an unprecedented rate in modern time in the world's biggest English speaking country, the United States, it is contracting very rapidly in the world's second biggest English speaking country, Britain.

The latest industrial production data from Britain shows that it was 3.3% lower in December 2011 than in December 2010. However, if we look at manufacturing alone it was up by 0.5% compared to a year earlier. In part this reflected a 5.7% drop in electricity production reflecting the fact that December was warmer in 2011 than in 2010, but bhe main reason for this discrepancy is that the component called mining and quarrying sector saw a jaw dropping 15.5% decline in output. The drop in electricity production reflected a temporary fluke due to weather conditions (likely revered with the recent cold snap), but the drop in mining production seems to be more or less structural at least for the time being as mining production is as much as 31% lower than the 2008 average.


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