Output at manufacturers expanded at a steep pace in December, with growth reaching an eleven-month high. Panellists attributed greater production to more favourable demand conditions and increased new order volumes.
New business received by manufacturers continued to rise in December, with the rate of expansion accelerating to a ten-month high. Anecdotal evidence linked increases to greater demand from new and existing clients. Exports sales, however, grew at a marginal pace.
In line with greater production requirements, firms added to their payrolls and at the fastest rate since September 2014. Increased capacity pressures were also reflected in backlog accumulation. The upturn in outstanding business accelerated and was the quickest since October 2015.
Meanwhile, input price pressures intensified with the rate of cost inflation accelerating for the second consecutive month. Furthermore, the marked rate of increase was the second-fastest since December 2013. Panellists linked rises to higher raw material prices, which partly stemmed from supplier delays. Meanwhile, factory gate charges rose solidly, despite the rate of inflation softening since November.
Greater production requirements also impacted purchasing activity which increased at the fastest pace since February. As a result, pre-production stocks also expanded at the end of the year.
Business confidence remained robust in December, with manufacturers reporting the second-highest level of optimism since January 2016. Positive output expectations were linked to forecasts of greater client demand.