Britain's buoyant manufacturing sector recorded strong growth in the fourth quarter, data released Tuesday showed, indicating that it will continue to provide support to wider economic growth.
The seasonally adjusted IHS Markit/CIPS PMI posted 56.3 in December (above 50 means growth), a slight decline from November's high of 58.2, the strongest figure in more than four years.
The headline PMI has now remained above the 50.0 no-change mark for 17 consecutive months, and the average reading over the final quarter of 2017 (57.0) was the best since the second quarter of 2014.
December saw rates of expansion in output, new orders and employment slow from November's highs, growth in all three remained solid and well above long-run trends.
Ruth Gregory, British economist with Capital Economics, a London-based financial data firm, told Xinhua that the survey suggests manufacturing "provided valuable support to GDP growth in Q4."
The large devaluation in sterling as a result of the Brexit vote, with the pound falling from 1.48 U.S. dollars at the time of the June 2016 vote to as low as 1.22 U.S. dollars has caused strong domestic inflation growth.
While CPI inflation has risen from 0.5 percent in June 2016 to 3.1 percent now, on the back of increased raw material and supply chain costs, has outstripped wage growth resulting in a slowdown in consumer spending, a major driver of economic growth.
The weaker pound has also provided a boost to manufacturing exports, making them more competitive.
"Sterling's slide, along with solid global growth, appears to be providing significant support for manufacturers," Gregory said.
Despite the drop in the new export orders balance from 56.3 in November to 55.3 in the December figures, the average for Q4 was still well above its long-run average of 50.8.
"This provides some reassurance that growth in export volumes will maintain its recent strong pace," said Gregory.
"Taken together with slowing import growth, as consumer spending growth remains subdued, this should allow net trade to provide a bigger boost to GDP growth."
The seasonally adjusted IHS Markit/CIPS PMI posted 56.3 in December (above 50 means growth), a slight decline from November's high of 58.2, the strongest figure in more than four years.
The headline PMI has now remained above the 50.0 no-change mark for 17 consecutive months, and the average reading over the final quarter of 2017 (57.0) was the best since the second quarter of 2014.
December saw rates of expansion in output, new orders and employment slow from November's highs, growth in all three remained solid and well above long-run trends.
Ruth Gregory, British economist with Capital Economics, a London-based financial data firm, told Xinhua that the survey suggests manufacturing "provided valuable support to GDP growth in Q4."
The large devaluation in sterling as a result of the Brexit vote, with the pound falling from 1.48 U.S. dollars at the time of the June 2016 vote to as low as 1.22 U.S. dollars has caused strong domestic inflation growth.
While CPI inflation has risen from 0.5 percent in June 2016 to 3.1 percent now, on the back of increased raw material and supply chain costs, has outstripped wage growth resulting in a slowdown in consumer spending, a major driver of economic growth.
The weaker pound has also provided a boost to manufacturing exports, making them more competitive.
"Sterling's slide, along with solid global growth, appears to be providing significant support for manufacturers," Gregory said.
Despite the drop in the new export orders balance from 56.3 in November to 55.3 in the December figures, the average for Q4 was still well above its long-run average of 50.8.
"This provides some reassurance that growth in export volumes will maintain its recent strong pace," said Gregory.
"Taken together with slowing import growth, as consumer spending growth remains subdued, this should allow net trade to provide a bigger boost to GDP growth."
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