"On its current track, the sector should achieve output growth of over 1% in the final quarter while filling around 10-15 thousand jobs, continuing its positive contributions to both the broader economic and labor market recoveries."
- Rob Dobson, senior economist at Markit
British manufacturing activity rose at a slower pace than expected in December, clouding optimism about the nation's economic outlook. In a report, Markit said that the U.K.'s manufacturing PMI declined to a seasonally adjusted 57.3 from 58.1 in November, while analysts had expected the index to fall to 58.0 in December. The average PMI gauge for the last three months of the year was the highest since the first quarter of 2011. After the release of the data, the Sterling was little changed versus the U.S. Dollar, with GBP/USD falling 0.03% to 1.6555.
While manufacturing has yet to reach the pre-crisis output levels, unlike the service sector, which has already surpassed them, Markit said that broad-based sector growth should keep the recovery on track throughout 2014. December's report showed an eighth consecutive monthly growth in manufacturing employment with the second-strongest rate of jobs gains in the last two and a half years. The survey also showed a growth in exports for a ninth consecutive month in December, though growth slowed to the weakest rate since September. U.K. manufacturers posted increasing demand from Brazil, China, Ireland, Russia and the U.S. Also, the report pointed to signs of inflationary pressures mounting within the sector, with both average input costs and output charges increasing at faster rates last month.
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