British manufacturing activity growth unexpectedly slowed in November to its weakest pace in eight months and firms' prices rose at their slowest rate in six months, a survey showed today.
The CIPS/RBS Purchasing Managers Index fell to 52.6 in November from a downwardly revised 53.5 in October to record the lowest reading since March and confound analysts' forecasts for an improvement to 54.0.
Factory output growth slowed markedly, which firms blamed on supply disruptions. But orders growth also slowed, while export orders may have been dented by the strong pound.
Moreover, firms cut jobs for the first time in six months in a move to increase efficiency as they were unable to raise prices to keep up with surging costs. The survey showed factory gate inflation eased sharply, with the output prices index slipping to a six-month low of 53.8 from October's 3-month high of 56.0, while the index of firms' input costs eased to 63.2 from 63.4 - its lowest since January.
The figures suggest companies have not been able to make October's price hikes stick and may provide some comfort to policymakers worried about inflation pressures.
Meanwhile France's manufacturing sector expanded at its fastest pace in four months last month but output growth slowed slightly, a CDAF/RBS Research survey showed today.
The CDAF/RBS's Purchasing Managers' Index (PMI), which measures activity in French manufacturing, rose to 56.5 from 56.3 in October, staying above the 50.0 level which separates growth from contraction for an 18th month.
"Although growth of output eased, the PMI was supported by faster expansion of new orders, employment, and stocks of purchases," NTC Research, which compiles the survey, said in a statement.
The output index fell to 57.6 from 59.0 in October. The survey showed export orders rose to a seven-month high of 60.1 in November from 59.4 the previous month.
"It's a very broad-based pattern of growth in manufacturing... Even exports is at a seven-month high despite what we're seeing with the (highly-valued) euro," NTC's chief economist Chris Williamson said.
The PMI follows unexpected poor data for French gross domestic product (GDP) released last week which showed the economy registered no growth in the third quarter, with activity pulled down by lower exports and business inventories.
Economists said they expected an improvement in the final three months of the year.