Anecdotal evidence cited weaker demand from clients in the US. Some firms also reported a drag on export competitiveness from higher raw material costs (particularly steel).
Backlogs of Work
Despite a softer rise in new business volumes, latest data signalled a faster accumulation of unfinished work at manufacturing companies. The seasonally adjusted Backlogs of Work Index pointed to the sharpest rate of increase since August.
Panel members noted that supply chain disruptions had contributed to higher levels of unfinished business at the end of the year.
Stocks of Finished Goods
Adjusted for seasonal influences, the Stocks of Finished Goods Index dropped back below the 50.0 no-change value in December. The latest reading was the lowest for three months and signalled a marginal reduction in post-production inventories.
Manufacturers suggested that heightened uncertainty about the demand outlook had led to more cautious inventory policies.
Employment
A relatively strong rate of job creation was maintained across the manufacturing sector in December, although the seasonally adjusted Employment Index eased from the survey-record high seen in the previous month.
Increased staffing levels were widely linked to new product launches and long-term investment in additional plant capacity.
Quantity of Purchases
Growth of purchasing activity rebounded slightly from the 11 month low seen during November. However, the seasonally adjusted Quantity of Purchases Index continued to signal a subdued expansion of input buying in comparison to the trend seen in the first half of 2018.
Some survey respondents noted that reduced supply chain pressures had lessened the need to build up safety stocks in December.
Suppliers’ Delivery Times
The seasonally adjusted Suppliers' Delivery Times Index remained well below the 50.0 no-change value in December, thereby signalling a sustained deterioration in vendor performance.
However, the latest reading picked up since November and signalled the least marked lengthening of suppliers' delivery times for just over one-and-a-half years.
Stocks of Purchases
Stocks of purchases continued rise in the manufacturing sector during December.
The latest index reading was nonetheless the lowest since April and signalled only a modest accumulation of pre-production inventories.
Input Prices
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.
Where a rise in input prices was reported, survey respondents mainly cited greater steel costs. There were reports that lower prices for oil-related inputs had helped to moderate the overall rate of cost inflation in December.
Output Prices
Factory gate price inflation slowed for the second month running and reached its lowest point since March, according to the seasonally adjusted Output Prices Index.
Softer rises in average prices charged were widely linked to competitive pressures and weaker input cost inflation during December.
Future Output
Business expectations regarding the year ahead outlook for manufacturing production continued to moderate in December. The balance of firms forecasting an expansion in their output volumes was the least positive seen since February 2016.
Manufacturers noted that greater concern about the domestic economic outlook had weighed on their growth projections for 2019.
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