UK Manufacturing Eases in December: Markit
UK manufacturing activity eased in December, as export demand cooled to the slowest pace since September. Manufacturing recovery did not falter, however, as industrial output and new orders kept factories busy toward the end of 2013.
Markit Group’s gauge of UK manufacturing activity fell 0.8 percentage points to 57.3 in December. The gauge has been above the 50.0 mark that separates expansion from contraction for nine consecutive months. A median estimate of 24 economists surveyed by Bloomberg called for a reading of 58.4.
While not as robust as the previous month, December data showed the UK manufacturing industry ended 2013 in fine form. Domestic demand continued to strengthen, leading to a solid pace of expansion in production and new orders, which kept job creation close to November’s two-and-a-half year high. December signalled the eighth consecutive month of employment growth in manufacturing.
“UK manufacturing’s strong upsurge continued at the end of 2013, with rates of growth in production and new orders still among the highest in the 22-year PMI survey history,” said Rob Dobson of Markit Group. “On its current track, the sector should achieve output growth of over 1 percent in the final quarter.”
Manufacturing has been a key driver of the UK’s unparalleled recovery. The manufacturing industry was firing on all cylinders in December, with output and new orders rising across all segments of the production economy, including small- and medium-sized enterprises and large-scale producers. As the manufacturing industry approaches its pre-crisis peak production, market participants are speculating whether the upturn can translate into a self-sustaining recovery in 2014.
The Organisation for Economic Cooperation and Development has upgraded the UK’s growth forecast to 2.4 percent in 2014, which could prime the Bank of England to consider raising interest rates in the not-too-distant future.
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