A Markit/Cips survey found that new orders are still among the highest in the 22-year PMI survey history
Britain’s manufacturers finished 2013 on a high note after a leading survey of the sector recorded the ninth straight month of strong output growth in December.
The Markit/Cips survey found that in the run-up to Christmas manufacturers were in upbeat mood after a rise in orders for the 10th month in a row.
Analysts said the figures were a strong signal that the sector’s growing momentum would continue into 2014, despite a slight dip in the strength of output growth last month from a near 20-year high in November.
The seasonally adjusted purchasing manager’s index (PMI) compiled by Markit fell from 58.1 to 57.3 in December, where a figure above 50 marks an expansion of activity.
Rob Dobson, senior economist at Markit, said: “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.
“On its current track, the sector should achieve output growth of over 1% in the final quarter while filling around 10-15,000 jobs, continuing its positive contributions to both the broader economic and labour market recoveries.”
Manufacturers have been adding jobs since May and the steady rise accounts for a significant proportion of the recovery in private sector jobs while the public sector has shed jobs.
Dobson said manufacturers have largely benefited from a resurgent domestic market for the flow of new orders. He said UK exporters, which have struggled to make much headwind in the last year, were starting to see the benefits of entering previously untapped markets in Brazil, China and Russia, alongside more traditional destinations in Ireland and the US, though the overall export figure remained lacklustre.
He warned that the situation remained fragile while manufacturers had yet to recover ground lost in the aftermath of the financial crisis.
“With the manufacturing sector still some 9% off its pre-crisis peak production, the question everyone wants answering is whether this upturn can develop into a self-sustaining recovery. The news is still good on this score, as growth is coming from a broad base that should help keep the rebound on track during the early stages of 2014.
Carl Astorri, senior economic adviser to the EY Item Club, said the figures were consistent with GDP growth of around 0.8% in the fourth quarter of 2013.
“The manufacturing sector has ended 2013 in a position of relative strength and looks set to push on in early-2014. The only concern is the slowdown in export growth – the holy grail of a more balanced recovery remains elusive for the time being.”
Link to article: feeds.theguardian.com/c/34708/f/663889/s/356cd154/sc/24/l/0L0Stheguardian0N0Cbusiness0C20A140Cjan0C0A20Cuk0Emanufacturing0Eninth0Emonth0Egrowth/story01.htm