UK manufacturing activity grew at its fastest pace in more than two years in December, a survey has indicated.

The Chartered Institute of Purchasing & Supply’s purchasing managers’ index rose to 54.1 from 51.8 in November. A score above 50 indicates growth.

The survey also found an increase in the new orders index to 57.4, the highest level since July 2007.

The pace of job cuts in the sector was the weakest since May 2008 and mainly centred on larger companies.

The pound jumped higher after the data was released and gained 0.2% on the US dollar to reach $1.62.

Some analysts suggest the increase in the purchasing managers’ index (PMI) is a sign that 2010 could be a better year for the sector.

“December data signal a positive end to a tumultuous year for UK manufacturers,” said Rob Dobson, senior economist at Markit, which helps to compile the PMI data.

But worries over the general state of the UK economy mean others are more cautious.

“Yes, it’s an encouraging number, taken alone. But an awful lot depends on global economic growth this year and whether UK manufacturers can continue to export reasonably successfully,” said Mark Miller, economist at Lloyds TSB.

The CIPS UK Manufacturing PMI is compiled from 600 purchasing managers’ responses to questions on subjects such as production levels and new orders.

Categories: US Markets, World Economy
No Comments »