Brexit stockpiling gives short-term boost to United Kingdom manufacturing

Workers make pipes used for drilling at a factory in an industrial area in Mumbai

Workers make pipes used for drilling at a factory in an industrial area in Mumbai

"Irish manufacturers experienced a slowdown in growth in December, with PMI data indicating weaker rises in output, new orders and employment", said Amritpal Virdee, an economist at IHS Markit, which compiles the Ireland manufacturing survey.

The Final Euro Zone Composite Purchasing Managers' Index (PMI) for December, a good guide to overall private sector growth, slipped to 51.1, the lowest in more than four years, from 52.7 in November.

This was higher than the 50.4 recorded in November when it hit a 28-month low, and above the 50.7 reading economists were expecting.

The last three months of 2018 saw manufacturers report the worst quarterly performance in terms of production since the second quarter of 2013.

Results of a Caixin survey on China's manufacturing in December indicated that factory activity contracted for the first time in 19 months amid a trade dispute with the US. The same was true for new orders, where a marked expansion was recorded that extended the current sequence of growth to 37 months.

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As a result, manufacturing companies have curtailed their expectations for output growth in 2019, with business optimism easing to its lowest for nearly three years.

The latest numbers from British manufacturers are in stark contrast to numerous world's top economies, which posted a contraction last month.

New jobs were created at the slowest rate in almost three and a half years in December, suggesting that political uncertainty is starting to feed through into businesses' hiring decisions.

The BoE figures showed the annual growth rate in unsecured consumer lending had slowed to 7.1 percent in November from 7.4 percent in October, the smallest increase since March 2015. "The service sector typically plays a major role in driving economic growth, but is now showing worrying signs of having lost steam". The main positive development for the service sector has been a softer pace of input cost inflation on average in the final quarter of 2018, as lower fuel prices helped to o set some of the pressure on operating expenses from rising staff wages. Uncertainties regarding Brexit disruption on supply chains and the exchange rate are also weighing on business confidence. There were also reports that greater food prices and higher costs for imported items had pushed up operating expenses. The pace of inflation fell to an 11-month low.

House prices grew just 0.5% in 2018, according to Nationwide Building Society. This was the first reduction since February 2016.

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