FROM 5TH JANUARY INTELLIGENCE REPORT:
Global manufacturing was either solid or showing superb growth in December, according to the latest Purchasing Managers’ Indices. While the IHS Markit/CIPS UK Manufacturing PMI was down from November’s 58.2, at 56.3 in December this was still strong growth as it was comfortably ahead of the 50.0 level that splits growth from decline.
The average reading of 57.0 for the final quarter of 2017, was the best since the second quarter of 2014. While the overall amount of new orders and manufacturing output increased, with export demand pushing this, there was a slowdown reported by producers of consumer goods.
Manufacturers in the UK also noted a reduction in the price of raw materials in December, although these remained relatively high. The price of paper, plastics and metals were all reported as higher in December. However, UK manufacturers have been able to pass these costs on in terms of higher selling prices. In the eurozone, the IHS Markit Eurozone Manufacturing PMI was at the highest since the index began in 1997. At 60.6 in December, this was up on the previous record which was November’s 60.1.
Austria led the way with 64.3, followed by Germany’s 63.3, Netherland’s was next with 62.2 then Ireland with 59.1. France at 58.8, Italy at 57.4 and Spain with 55.8 all showed comfortable growth too. Manufacturing output and new orders grew strongly in Europe.
Input prices for European manufacturers grew in December, with supply chain pressures pushing up prices as manufacturers scrabbled to get hold of raw materials for their products. The IHS Markit US Manufacturing PMI was at its strongest level since March 2015 in December, reaching 55.1 from 53.9. New business orders reached their highest level in ten months as manufacturing output also grew.
US manufacturers also reported that the cost of raw materials was rising for them. However, China’s official PMI was down in in December to 51.6 from 51.8 the month before. This meant though it was the same as the annual average. The raw materials sub-index was 48.0, down from 48.4 in November.