Manufacturing sector shows record growth in December

Manufacturing sector shows record growth in December

Manufacturing sector shows record growth in December

Among components, output, new orders and employment all recorded historically marked growth in December.

Factory Purchasing Managers' survey from euro area and the United Kingdom are due on Tuesday, headlining a light day for the European economic news.

However, full-year growth was still the fastest in three years at 3.5 percent, raising the possibility that the Monetary Authority of Singapore (MAS) could tighten its exchange rate-based monetary policy this year. In response to greater inflows of new business, job creation quickened to the greatest since August 2012.

"Interestingly, the wages component dipped in December, but at 60.2 it does point to the prospect of some pick-up in wages growth", Mr Oliver said.

The slowdown was reflected in the drop in buying activity in December, the sharpest decline since September. As a outcome, the sector observed a modest increase in pre-production inventories for the first-time since June.

China's manufacturing sector continued to expand in December, pointing to economic resilience in the country's factory sector. Members of the survey team said late delivery was mainly due to the shortage of raw materials.

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Growth in British manufacturing cooled last month from four-year highs struck in November, but the sector remained a bright spot in Britain's economy heading into 2018, a survey showed on Tuesday.

"(British manufacturing) broadly maintained its solid boost to broader economic expansion in the fourth quarter", said Rob Dobson, director at PMI compiler IHS Markit.

"That said, the level of business sentiment eased from November's 47-month high and remained weaker than the series average", the report noted. In breakdown, the new order index for the service sector increased slightly slower month on month to 50.9, and that for the construction sector rose at a faster pace to 58.1.

Moreover, as consumer spending recuperated, firms were restricted in their ability to pass on higher cost burdens to clients which further placed upward pressure on firms' margins.

"Given the strong conditions evident in the manufacturing sector, it is no surprise to see that firms are upbeat about the outlook", Philip O'Sullivan, economist with Investec, said.

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