UK Private Sector Recovers In December
The UK private sector output recovered in December driven by
another solid increase in the manufacturing sector, flash survey
data from IHS Markit showed Wednesday.
The IHS Markit/Chartered Institute of Procurement & Supply
composite output index rose to 50.7 in December from 49.0 in
A score above 50 indicates expansion. But this was below
economists' forecast of 51.3.
The service sector almost stagnated due to the ongoing Covid-19
restrictions on hospitality, leisure and travel businesses, while
the manufacturing sector growth was driven by stockbuilding ahead
of the Brexit deadline.
The services Purchasing Managers' Index improved to 49.9 from
47.6 in the previous month. This was also weaker than the expected
score of 50.5.
The manufacturing PMI came in at 57.3 versus 55.6 in November.
Economists had forecast the reading to rise marginally to 55.9.
The survey showed that shortages of critical inputs, alongside
pressure on capacity following forward-purchasing by clients ahead
of Brexit, contributed to the sharpest rise in backlogs of work
across the manufacturing sector since May 2010.
Further, there was an increase in wait times from suppliers and
the lengthening of lead times was the third-steepest since the
survey began in 1992.
The survey showed that overall new business volumes stagnated
across the private sector as a whole in December. A robust and
accelerated rise in input prices added to pressure on UK private
On a more positive note, there were signs of stabilization in
employment numbers after the steep cuts seen since the start of the
Meanwhile, business optimism about the year-ahead outlook eased
only slightly since November. Confidence was mostly attributed to
favorable news about vaccine roll-outs and hopes of a return to
more normal trading conditions.
As Covid worries and no-deal uncertainty remains, firms will
continue to face the most challenging business conditions in a
generation for the next few months," Duncan Brock, group director
at CIPS, said.