Growth in the UK’s manufacturing sector slowed at the end of 2014, raising further doubts about the government’s success in rebalancing the economy away from property, services and shopping.
Manufacturing activity, which accounts for around 10% of economic output, fell to a three-month low in December, according to the widely watched CIPS/Markit survey of purchasing managers.
The headline index fell to 52.5 in December, down from 53.3 in October and November. Anything over 50 is counted as expansion.
Although manufacturing activity has now increased for 22 straight months in a row, the slowdown is a blow to government hopes of boosting British exports, a key plank of a rebalancing drive that is supported by the three mainstream political parties.
Manufacturing businesses continued to win new orders, but largely as a result of domestic demand, rather than export orders. Many manufacturing companies were hiring new staff to clear backlogs of orders and employment in the sector has increased for 20 months in a row.
Companies told CIPS/Markit that demand from North America and the Middle East was improving, while the picture for the eurozone was mixed, with some businesses reporting new orders and others recording a decline.
A separate survey showed that manufacturing industry in the eurozone was hardly growing. The headline index was just in growth territory: it rose to 50.6 in December compared to 50.1 in November.
via The Guardian