UK manufacturing unexpectedly cools as export demand weakens
PM David Cameron said Britain's recovery is real, but it's also fragile, and the govt has a five-point plan to spur growth
London: UK manufacturing growth unexpectedly cooled in December as export demand weakened.
A gauge of factory activity fell to 57.3 from a revised 58.1 in November, Markit Economics said in a report in London on Thursday. Economists forecast 58.4, based on the median of 24 estimates in a Bloomberg news survey. The index has been above the 50 level that divides expansion from contraction for nine straight months.
Prime minister David Cameron said on Wednesday that Britain’s recovery is real, but it’s also fragile, and the government has a five-point plan to spur growth.
While the economy is strengthening, Bank of England governor Mark Carney has said that policy makers won’t consider raising interest rates at least until unemployment drops to 7%.
New export business increased for the ninth consecutive month in December, Markit said. However, the rate of growth eased to the weakest since September.
The pound weakened against the dollar after the report and was at $1.6554 as of 9:36 a.m. London time, down 0.1%.
Markit said that for the fourth quarter of 2013, the average factory index reading was 57.2, the highest since the first three months of 2011. Rob Dobson, an economist at Markit, said manufacturing output growth probably exceeded 1% in the three months.
In December, new order growth remained robust and employment rose, according to Markit.
An index of European manufacturing rose to 52.7 in December from 51.6 in November, Markit said in a separate report. That’s unchanged from an initial estimate published on 16 December .
Chinese manufacturing gauges slipped in December, underscoring the challenges for President Xi Jinping as he tries to sustain economic momentum while rolling out reforms.
A measure from HSBC Holdings Plc and Markit fell to 50.5 from 50.8 the previous month, according to a statement today. A separate gauge compiled by the statistics bureau and logistics federation released yesterday declined to 51 from 51.4. A measure of manufacturing in the US will be released later today. BLOOMBERG
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