British factory activity jumped unexpectedly in December to grow at its fastest pace since September 2011, a survey showed on Wednesday, raising the chance that the economy eked out growth at the end of 2012.
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 in a Reuters poll of 24 economists.
Britain’s 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 will avoid contraction.
The manufacturing 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.
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