UK manufacturing growth slows again in December

The UK’s manufacturing sector grew at its slowest pace for three months in December, a survey has indicated.

The Markit/CIPS UK manufacturing PMI fell to 51.9 in December, down from 52.5 in November and October’s measure of 55.5. Any figure over 50 indicates expansion.

The reading was still above average for 2015 and means the sector has expanded for almost three years.

But Markit said it marked a “disappointing” end to the year.

“This suggests that industry will make, at best, only a marginal positive contribution to broader economic growth in the final quarter of the year,” said Markit senior economist Rob Dobson.

“Although this would be an improvement on the second and third quarters, it does also suggest that manufacturing output over 2015 as a whole may be below the level achieved in 2014.”

Manufacturing failed to contribute to economic growth throughout the first three quarters of 2015, with the much larger services industry continuing to drive the UK’s economic recovery.

New orders came in at the slowest pace in five months, according to the survey, while Markit’s index of export orders – which had improved in the previous three months – slipped back.

The result was also worse than economists had expected.

IHS Global Insight economist Howard Archer said the survey’s performance was “pretty lacklustre, suggesting that 2016 is also likely to be challenging for manufacturers”.

Nonetheless, ING’s James Smith said the overall economy remained strong and “the case for a rate hike in 2016 looks very compelling”.

BBC

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