UK manufacturing growth slowed more than forecast in December, retreating from a four-year high.
IHS Markit’s Purchasing Managers Index for the industry slid to 56.3, below the median estimate of economists for a reading of 57.9. Still, that pace of expansion left the quarterly average at the highest since 2014.
“Expansion remained comfortably above long-term trend rates,” said Rob Dobson, Director at IHS Markit. “The sector has therefore broadly maintained its solid boost to broader economic expansion in the fourth quarter. The outlook is also reasonably bright.”
The pound touched a three-month high of $1.3567 after the data. It was up 0.3 percent at $1.3549 as of 10:45 am London time.
The survey showed that growth in output, new orders and employment slowed from November’s highs, albeit to levels that still reflect solid gains. Meanwhile, the gauge of input costs eased to a four-month low.
While lower than forecast, December’s reading rounds off a solid year for the UK’s manufacturing sector, which has been boosted by the weaker pound in the wake of 2016’s Brexit vote.
Markit’s survey noted that an increase in new business reflected rising new export sales, with higher demand seen from clients in Europe, the US, China and the Middle East.
Companies also retained a positive outlook last month, with close to 54 percent expecting production to rise over the coming year.