Manufacturing figures show strong performance

THE manufacturing sector has been buoyed by encouraging data for  factory activity in December, which grew at its fastest pace since September 2011.

The Markit/CIPS Manufacturing Purchasing Managers’ Index (PMI) rose to a 15-month high of 51.4 in December from an upwardly revised 49.2 in November – a far stronger increase than any predicted.

The economy is forecast to shrink 0.1% in the last three months of 2012, but stronger-than-expected official services output data for October, released just before Christmas, raised the prospect that the economy may avoid contraction.

The index’s upturn takes it above the 50-mark that separates growth from contraction for the first time since March, and breaks with poor official data, which showed a 1.3% fall in factory output for October.

“UK manufacturing exited 2012 on a positive note, with December’s PMI data signalling a reassuringly solid return to growth for the sector,” said Rob Dobson, the Markit economist who compiled the survey.

“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.