A key survey of the UK's manufacturers indicates that factories raised output for a 20th successive month, as low oil prices set the tone for a strong start to 2015 for the sector.
The UK’s factories have weathered a gloom from the eurozone to deliver their 20th successive month of growth.
Markit’s manufacturing purchasing managers’ index (PMI) - a key gauge of the sector - rose unexpectedly from 53.2 to 53.5 in November.
Any number above 50 would imply that output in the sector was rising, while November’s reading suggested that the pace of growth had risen. City economists had expected the headline PMI to slip 0.2 points to 53.
Rob Wood, an economist at Berenberg, said that the figures showed a resistance to weakness in the eurozone. “With cheaper oil, the UK recovery should gets it fizz back next year”, he added.
Equivalent PMI surveys for the euro area released on Monday showed that of the bloc’s four largest economies, only Spain’s factories increased output in November, with a PMI of 54.7.
The Italian and French manufacturing sectors continued to contract, with PMIs at 49 and 48.4 respectively. The sectoral PMI for Germany slumped below 50, becoming the third large country to slip into contractionary territory.
Jeremy Cook, chief economist at currency firm World First, said: “November’s UK release paints a similar picture to that seen in October, in that the domestic picture is solid and strong but growth in export markets - particularly in the EU and emerging markets - is worse”.
The UK’s factories managed to increase employment growth in addition to gains in the rate of output growth, as the sectoral headcount rose for a 19th straight month in November, with job creation at a four-month high.
“Though progress is not as robust as in the first half of the year, balance is being restored as output, orders and employment levels all rise at moderate if unexciting rates”, said David Noble, group chief executive officer at the Chartered Institute of Procurement & Supply, who compiled the report along with Markit.