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Recovery continues despite PMI fall in December

GROWTH in UK manufacturing activity slowed in December, a survey has revealed.

But the monthly pace of expansion remained sharp as the sector continued to mount a recovery, according to the survey published yesterday by the Chartered Institute of Purchasing and Supply. The UK manufacturing sector, on CIPS's measure, has now expanded for nine consecutive months.

This period of expansion follows a difficult five years for the sector, in which it suffered a plunge in output and then a previous recovery which proved short-lived.

CIPS's purchasing managers' index (PMI) for UK manufacturing, a measure of activity including output, new orders, employment, suppliers' delivery times and stocks of goods purchased, fell from 58.1 in November to 57.3 in December on a seasonally-adjusted basis.

While this drop signalled a weakening of the pace of expansion, and the December index was adrift of the level of 58 forecast by the City, the manufacturing PMI remained well above the level of 50 calculated by CIPS to separate expansion from contraction.

CIPS's new orders index for UK manufacturing fell from 63.9 in November to 60.4 in December.

Howard Archer, chief UK economist at consultancy IHS Global Insight, said: "While manufacturing expansion slowed slightly in December, this should not mask the fact that this is still a robust survey and the manufacturing sector still looks likely to have seen robust expansion in the fourth quarter of 2013."

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