December saw further signs of growth emanating from the UK manufacturing sector. Output rose for the third successive month and new orders increased for the first time since September 2024. There were also signs of the trends in new export orders and employment moving closer to stabilizing after sustained downturns.
The seasonally adjusted S&P Global UK Manufacturing Purchasing Managers’ Index (PMI) rose to 50.6 in December, from 50.2 in November, its highest level for 15 months but below the earlier flash estimate of 51.2. The PMI has posted above its neutral 50.0 mark (separating growth from decline) in each of the past two months.
Three of the PMI sub-components registered readings consistent with improved operating conditions in December, as output and new orders both rose, and suppliers' delivery times lengthened. Although stocks of purchases and employment both declined, this was to lesser extents than in November.
Output rose across the consumer, intermediate and investment goods sectors, the first time concurrent growth has been registered since August 2024.
A slight gain in new work intakes also contributed to the expansion of production volumes. Incoming new business rose for the first time in 15 months.
The domestic market was the main growth spur for new orders, as intakes of new work from overseas contracted for the forty-seventh successive month in December.
Although manufacturing employment decreased for the fourteenth month running in December, the rate of job loss was the weakest during that sequence of decline.
Business confidence about the year ahead outlook dipped from November's nine-month high in December.