Manufacturing activity remains near record low

Manufacturing activity remained near a record low today after the recent slump in the value of the pound failed to boost order books.

The latest purchasing managers' index for the industry showed a reading of 34.9 in December - close to the lowest level in the survey's 17-year history. A figure below 50 means the sector contracted during the period.

It is the eighth consecutive month of falls for the sector, although today's figure for December was slightly higher than forecast in the City.

The Chartered Institute of Purchasing & Supply (CIPS) said the average reading for the sector across 2008 was the weakest for a calendar year since the survey began in 1992. This also applied to output, new orders and employment.

CIPS director Roy Ayliffe said smaller firms experienced the fastest rate of contraction amid the collapse in global demand.

He added: "Even the weakening pound did little to encourage overseas activity as the economic crisis continues to make its mark across the globe."

CIPS said that employment in December fell at its fastest pace in the history of the survey.

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