USA manufacturing PMI index falls to 15-month low in December

USA manufacturing PMI index falls to 15-month low in December

LONDON, Jan 4 (Reuters) - Britain's economic growth slowed to a crawl at the end of 2018 and the housing market is stalling, according to data published on Friday, less than three months before Brexit.

In an early warning sign that GDP growth is set to have nearly stalled in the last three months of 2018, the purchasing managers' index (PMI) showed that subdued demand from cash-strapped consumers also acted as a brake on sales.

Although extending the current run of expansion to five-and-a half years, the latest PMI reading was the lowest seen since February 2016, said the data provider on Wednesday. In addition to the PMI figure, recent surveys for manufacturing and construction suggest that GDP growth for the last quarter of 2018 was just 0.1%.

Irish manufacturing activity eased as the year drew to a close, with output, new orders and employment growth all slowing, according to the latest report on the sector.

Canadian manufacturers experienced a renewed slowdown in growth at the end of 2018, with both production volumes and incoming new work expanding at softer rates than in November.

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Samuel Tombs, chief United Kingdom economist at Pantheon Macroeconomics, said: "The continued weakness of the business activity index in December adds to evidence that the economy effectively has ground to a halt, primarily due to mounting concerns about Brexit".

The latest numbers from British manufacturers are in stark contrast to numerous world's top economies, which posted a contraction last month.

The headline IHS Markit/CIPS UK services PMI rose slightly more than forecast by economists polled by Reuters, to 51.2 in December.

The seasonally adjusted Input Prices Index pointed to another slowdown in cost pressures at manufacturing companies in December, with the rate of inflation the weakest seen since August 2017. Uncertainties regarding Brexit disruption on supply chains and the exchange rate are also weighing on business confidence. Markets have priced out any increase in the next 12 months, even as BOE Mark Carney warned that a disorderly exit from the European Union may force the bank to raise rates to contain inflation. There were reports from panellists of lower costs for items such as oil and paper. Compared with a year earlier, prices were up just 0.5 percent compared with a 1.9 percent rise in the year to November.

"Survey respondents also noted that the strengthening infrastructure pipeline is set to become a key engine of growth in 2019, despite concerns about possible delays to the delivery of major projects".

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