Manufacturing sector activity returned to growth in December after eight months of contraction

Manufacturing sector shows growth

Figures have revealed activity in the manufacturing sector surged to a 15-month high in December.

The latest Markit/CIPS purchasing managers' index (PMI) showed a headline reading of 51.4 in December, marking a return to growth for the first time since March and the highest reading since September 2011.

Manufacturers were boosted by increased demand from British firms, which helped output from the sector rise at the fastest pace for 20 months, offsetting an ongoing slump in orders from the crisis-hit eurozone.

The closely-watched survey suggests the manufacturing sector contracted overall in the fourth quarter despite the December recovery, but experts said it raises hopes that manufacturing output has stabilised.

Howard Archer, chief European & UK economist at IHS Global Insight, said the manufacturing improvement may also help the wider economy avoid an end-of-year contraction.

"The marked pick-up in manufacturing activity in December is a significant boost to hopes that the economy was at least flat in the fourth quarter and could even have grown marginally," he said.

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