Eurozone dominates PMI manufacturing index growth

Japanese manufacturing activity expanded at the fastest pace in nearly four years in December as new orders accelerated, in a sign that steady economic growth will continue into the new year.

That means that in the final throngs of 2017, activity levels improved at the fastest pace since the recovery from the global financial crisis. "The overall upturn was supported by the sharpest increase in output and new orders since December 2012 and October 2016 respectively".

IHS Markit, which compiled the survey, said companies had mainly attributed the higher rate of activity to inflows of new orders, which tested capacity and led to higher rates of employment. The Nikkei India Services Sector PMI rose to 50.9 in December from 48.5 in November. The seasonally adjusted IHS Markit final US Manufacturing Purchasing Managers Index registered 55.1 in December, up from 53.9 in November. Panellists attributed greater production to more favourable demand conditions and increased new order volumes.

Strong cost pressures persisted across the construction sector, driven by rising prices for a range of inputs.

At the same time, consumer credit continued to expand at a fairly strong £1.4bn on the month. "That said, it remained on a weak growth trajectory amid reports that the goods and services tax (GST) was still hindering efforts to secure new clients", said Aashna Dodhia, economist at IHS Markit and the author of the report.

"Meanwhile, manufacturers raised their staffing levels during December". With business optimism about the year ahead running at its highest for two years in the closing months of 2017, companies are clearly expecting to be busier in 2018.

PMI data saw record highs in Austria, Germany and Ireland and remained close to November's peak in the Netherlands.

Samuel Tombs, chief United Kingdom economist at Pantheon Macroeconomics, said: "The construction sector ended 2017 on a weak note, and it likely will continue to struggle in 2018".

Vanessa Coleman