GROWTH of the UK manufacturing sector slowed in the fourth quarter to its weakest pace in a year-and-a-half, a survey has revealed.
The survey, published yesterday by the Chartered Institute of Purchasing and Supply, is further evidence of the unbalanced nature of the UK economic recovery.
Growth of CIPS's broad measure of manufacturing activity slowed in December to its weakest pace in three months, as the rate of increase of new orders eased significantly.
The significantly weaker-than-expected survey pushed the pound to a 17-month low against the dollar, with sterling dropping well below $1.54. Financial markets took the view that the soft manufacturing performance in December made it even more likely the first rise in UK base rates from their record low of 0.5 per cent would not come anytime soon.
CIPS's purchasing managers' index for UK manufacturing, which measures changes in output, new orders, employment, suppliers' delivery times and stocks of goods purchased, fell from 53.3 in November to 52.5 in December on a seasonally-adjusted basis.
While above the level of 50 deemed to separate expansion from contraction, the December PMI reading signalled the weakest monthly growth since September.
The average reading for the October to December period signalled the slowest growth in a year-and-a-half.
Economists had predicted the manufacturing PMI would have risen to 53.7 in December.
Howard Archer, chief UK economist at consultancy IHS Global Insight, said: "Manufacturing activity has clearly lost appreciable momentum compared to the peak levels seen earlier in 2014 and it is unlikely to have made a strong contribution to GDP (gross domestic product) growth in the fourth quarter of last year."
Why are you making commenting on The Herald only available to subscribers?
It should have been a safe space for informed debate, somewhere for readers to discuss issues around the biggest stories of the day, but all too often the below the line comments on most websites have become bogged down by off-topic discussions and abuse.
heraldscotland.com is tackling this problem by allowing only subscribers to comment.
We are doing this to improve the experience for our loyal readers and we believe it will reduce the ability of trolls and troublemakers, who occasionally find their way onto our site, to abuse our journalists and readers. We also hope it will help the comments section fulfil its promise as a part of Scotland's conversation with itself.
We are lucky at The Herald. We are read by an informed, educated readership who can add their knowledge and insights to our stories.
That is invaluable.
We are making the subscriber-only change to support our valued readers, who tell us they don't want the site cluttered up with irrelevant comments, untruths and abuse.
In the past, the journalist’s job was to collect and distribute information to the audience. Technology means that readers can shape a discussion. We look forward to hearing from you on heraldscotland.com
Comments & Moderation
Readers’ comments: You are personally liable for the content of any comments you upload to this website, so please act responsibly. We do not pre-moderate or monitor readers’ comments appearing on our websites, but we do post-moderate in response to complaints we receive or otherwise when a potential problem comes to our attention. You can make a complaint by using the ‘report this post’ link . We may then apply our discretion under the user terms to amend or delete comments.
Post moderation is undertaken full-time 9am-6pm on weekdays, and on a part-time basis outwith those hours.
Read the rules hereComments are closed on this article