UK manufacturing PMI hits 6-month highs at 54.2 in Dec, a positive surprise

The manufacturing sector activity in the UK economy extended its upbeat momentum in the month of December, the latest data from Markit showed on Wednesday.

The manufacturing Purchasing Managers' Index (PMI) in the UK arrived at 54.2 points in December, as compared to a previous 53.1 reading. Markets had predicted the PMI to tick lower to 52.5.

Key Points:                

New order and new export order inflows strengthen.

Stocks of purchases and finished goods rise sharply.

Rob Dobson of Markit commented in the release, “December saw the UK PMI rise to a six-month high, following short-term boosts to inventory holdings and inflows of new business as companies stepped up their preparations for a potentially disruptive Brexit.”

“Stocks of purchases and finished goods both rose at near survey-record rates, while stock-piling by customers at home and abroad took new orders growth to a ten-month high. Any positive impact on the PMI is likely to be short-lived, however, as any gains in the near-term are reversed later in 2019 when safety stocks are eroded or become obsolete.”