In the UK, the manufacturing PMI rebounded from an upwardly revised 47.7 to 49.6 in December, while the consensus was looking for a further worsening in sentiment. After two months of contraction, the index is now again close to stabilization levels. Also the details are encouraging with production above the 50 benchmark level for the first time in three months. (40,2 EUR, -0,61%) new orders improved significantly too (by 3 points), but this was mainly due to stronger export orders, while domestic orders remained weak.
Employment continued to contract, but the pace of decline eased significantly. Both input and output price pressures continued to ease in December. Despite the stabilization in December, manufacturing output was likely a drag on growth in the fourth quarter. Looking ahead, the outlook remains uncertain as manufacturers are relying heavily on backlogs of work to prop up production, while domestic orders remain very poor.