British manufacturing activity growth slowed unexpectedly last month to its weakest pace since March, a survey showed today.
The CIPS/RBS Purchasing Managers Index eased to 51.9 in December from a downwardly revised 52.5 in November, notching up its lowest reading in nine months and confounding analysts' expectations for 52.6.
Any reading above 50.0 indicates expansion, while a reading below that mark signals contraction.
CIPS said the manufacturing sector performed better in 2006 than in 2005, with higher rates of growth for production and new business, but did not match 2004's performance.
Although recording its 18th straight month of expansion, factory output growth eased to a nine-month low of 52.1. The index for incoming new orders posted a 19th successive month of growth but eased slightly to 53.1, its weakest since August.
The data are unlikely to alter expectations for higher interest rates, but policymakers may be mindful of any further signs of weakness in Britain's recovering manufacturing sector, especially among export markets.
Growth in export orders in December eased to its weakest since August, slipping to 51.5 from 52.5 in November. Policymakers and manufacturers alike may be relieved to see further indications that input price pressures are cooling in the sector.
The survey's reading for input price inflation, while still robust at 58.3, marked the weakest rate of increase since August 2005 and was well below November's strong 62.5.