A Markit/CIPS survey shows that the UK manufacturing sector showed signs of stabilisation in December. Production was broadly unchanged from November, and the decline in orders slowed. Any increases in output were largely linked to higher foriegn demand and outstanding business.

 

The seasonally adjusted Markit/CIPS UK Manufacturing PMI rose to 49.6 in December. Although this is up from a revised reading of 47.6 in November, the quarterly average is still at its lowest since Q2 2009.

 

Rob Dobson, Senior Economist at Markit and author of the Markit/CIPS Manufacturing PMI:

 

“December brought some brighter news for UK manufacturers. The level of production stabilised following contractions in October and November as a solid upsurge in new export business countered some of the weakness in the domestic market. Job losses were also less widespread than November, suggesting that pessimism about the coming year may have lifted a little.

 

“However, over the fourth quarter as a whole, producers reported their worst performance since the second quarter of 2009. Manufacturing will therefore likely be a drag on the economy in the closing months of the year. Looking ahead, manufacturers are currently relying heavily on backlogs of work to prop up production. This is only a temporary fix, and the trend in overall order books needs to improve if the sector is to avoid a protracted period of lacklustre performance.”