Manufacturing falls as year ends

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Manufacturing ‘ticked over’ in December making only a marginal contribution to economic growth in the final quarter, a survey has indicated.

The Markit/CIPS UK manufacturing PMI fell to 51.9 in December, down from 52.5 in November and October’s measure of 55.5. Any figure over 50 indicates expansion.

“This suggests that industry will make, at best, only a marginal positive contribution to broader economic growth in the final quarter of the year,” said Markit senior economist Rob Dobson.

Lee Hopley, chief economist at EEF, the manufacturers’ organisation, said: “December’s PMI reading points to manufacturing ending 2015 with neither a bang nor a whimper. Activity levels appear to have been holding up in line with the long-run average as output and new orders tick over, and no more.

“With the CIPS report confirming our view that manufacturing output is likely to be flat over 2015 as a whole, the question now is whether the sector can regain much needed momentum in 2016. Industry PMI readings from Europe offer a few reasons for optimism that a recovery across the region will finally start to benefit UK exporters, but further weakening in China is likely to be a counteracting force into 2016.”

Martin Beck, senior economic advisor to the EY ITEM Club, said: “December’s CIPS manufacturing survey disappointed with its lowest reading in four months. As the sector is struggling to eke out growth, it looks like manufacturers are unlikely to have made more than a marginal contribution to GDP growth in the last quarter of the year.

“The weakening in manufacturing activity was broad-based.”