Investing.com – Manufacturing activity in the U.K. improved in December, but remained in contraction territory for the third consecutive month, official data showed on Tuesday.
In a report, market research group Markit said that its U.K. manufacturing PMI rose by 2.0 points to a seasonally adjusted 49.6 in December from a reading of 47.7 in November, whose figure was revised up from 47.6.
Analysts had expected the manufacturing PMI to ease down by 0.4 points to 47.3.
On the index, a reading above 50.0 indicates industry expansion, below indicates contraction.
The PMI has remained below the 50.0 no-change mark throughout the fourth quarter of 2011 and its average during this quarter was the weakest since the second quarter of 2009.
New export orders rose for the first time in five months in December, reflecting increased levels of new work from clients in Germany, East Europe and China.
Commenting on the report, David Noble, chief executive officer at the Chartered Institute of Purchasing & Supply, said, “It is encouraging to see output remain steady last month after the declines of recent months, but with the sector highly exposed to a shaky euro zone, ironing out economic problems in key export partners will be critical to how the sector performs.”
“The slight bounce in purchasing activity is likely to be short-lived as the pressure to reduce inventories and manage cash flow remains formidable,” Mr. Noble added.
Following the release of the data, the pound held on to gains against the U.S. dollar, with GBP/USD climbing 0.37% to trade at 1.5570.
Meanwhile, European stock markets were mixed. The EURO STOXX 50 eased up 0.25%, France’s CAC 40 shed 0.35%, London’s FTSE 100 rallied 1.25%, while Germany's DAX surged 1.4%.
In a report, market research group Markit said that its U.K. manufacturing PMI rose by 2.0 points to a seasonally adjusted 49.6 in December from a reading of 47.7 in November, whose figure was revised up from 47.6.
Analysts had expected the manufacturing PMI to ease down by 0.4 points to 47.3.
On the index, a reading above 50.0 indicates industry expansion, below indicates contraction.
The PMI has remained below the 50.0 no-change mark throughout the fourth quarter of 2011 and its average during this quarter was the weakest since the second quarter of 2009.
New export orders rose for the first time in five months in December, reflecting increased levels of new work from clients in Germany, East Europe and China.
Commenting on the report, David Noble, chief executive officer at the Chartered Institute of Purchasing & Supply, said, “It is encouraging to see output remain steady last month after the declines of recent months, but with the sector highly exposed to a shaky euro zone, ironing out economic problems in key export partners will be critical to how the sector performs.”
“The slight bounce in purchasing activity is likely to be short-lived as the pressure to reduce inventories and manage cash flow remains formidable,” Mr. Noble added.
Following the release of the data, the pound held on to gains against the U.S. dollar, with GBP/USD climbing 0.37% to trade at 1.5570.
Meanwhile, European stock markets were mixed. The EURO STOXX 50 eased up 0.25%, France’s CAC 40 shed 0.35%, London’s FTSE 100 rallied 1.25%, while Germany's DAX surged 1.4%.