UK's Dec manufacturing PMI at 15-month high
Index at 51.4; the highest rise since September 2011
By Gaurav Sharma | CFO UK | Published 11:22, 02 January 13
The UK's manufacturing Purchasing Managers' Index (PMI), an industry survey of the national factory output, rose to a 15-month high of 51.4 in December from an upwardly revised 49.2 in November.
While a level of above 50 is indicative of growth, December's unexpected jump was the fastest rise in the index since September 2011, according to Markit and CIPS who compile the data.
Rob Dobson, economist at Markit, noted, "UK manufacturing exited 2012 on a positive note, with December's PMI data signalling a reassuringly solid return to growth for the sector."
"The domestic market remained the main spur for growth in December, although there are also signs that global trade flows are stabilising as China and the US strengthen and the downturn in the euro zone eases," he added.
Commenting on the survey, Howard Archer, chief UK economist at IHS Global Insight, said the news offered some genuine hope for the manufacturing sector going into 2013, although conditions are clearly still tough.
"It still looks probable that manufacturing output contracted in the fourth quarter of 2012 given that latest hard data shows that it fell 1.3 percent month-over-month in October. However, the December PMI raises hope that manufacturing output did recover some of the lost ground later on in the quarter so that the overall drop was reined in to some extent," he told CFOWorld.
George Buckley, economist at Deutsche Bank, said there is a risk that the December manufacturing PMI level might not be sustained.
"But if it is, then we are moving, it would suggest, from a period of negative growth in the final quarter of last year to positive growth again. It's obviously very difficult to read, because we don't know (yet) what the services survey did but if you plot it against GDP, it is consistent with an improvement into positive territory. So it's encouraging in that sense," he concluded.
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