U.K. manufacturing expanded for a fourth month in November, an industry report showed, adding to signs of a pickup in Europe's second-biggest economy.
The main business index based on a survey of purchasing managers for the Chartered Institute of Purchasing & Supply and Royal Bank of Scotland registered 51.0, down from a revised 51.6 in October, Reuters said. The gauge has exceeded 50, which signals expansion, for four consecutive months. The reading was below the median estimate of 51.8 in a Bloomberg survey of 33 economists.
Britain's $2 trillion economy is heading for its slowest annual expansion in 13 years after oil prices surged as much as 51 percent, household spending weakened and manufacturing entered a recession in the first half. The Bank of England predicts growth will recover in 2006, helped by a pickup in consumer spending.
``Overall, the manufacturing outlook is better than it has been in the last few months,'' said Amit Kara, an economist at UBS AG. ``There's an improvement. The big picture is one where we still expect the recovery to sustain itself.''
The pound was little changed against the dollar at $1.7312 after the report as of 9:39 a.m. in London. The implied rate on the interest-rate future maturing in June was also unchanged at 4.58 percent. The contract settles to the three-month London interbank offered rate for the pound, which has averaged about 15 basis points more than the central bank's target for the past decade.
The report suggests manufacturing, accounting for 15 percent of the economy, may have expanded since September, when official figures showed it unexpectedly shrank for a second month.
Shares of Tomkins Plc, the world's biggest maker of car wiper blades, rose the most in two and a half years on Nov. 23 when its third-quarter profit beat analyst estimates. Corus Group Plc, Britain's biggest steelmaker, predicted ``a pickup'' in volume in the fourth quarter when it reported earnings yesterday.
The Bank of England said in its Nov. 16 inflation report that its regional agents had confirmed survey evidence pointing to more growth in manufacturing.
Still, some surveys suggest industry is struggling to grow. Factory orders remained close to a two-year low in November, the Confederation of British Industry, said Nov. 22. The group represents 200,000 companies including Rolls Royce Plc and BP Plc. (BP/)
Imperial Chemical Industries Plc, Britain's no.1 specialty chemical maker, said Nov. 3 its third-quarter profit fell amid increased job-cutting and raw material costs.
If a manufacturing recovery fails to materialize, that may delay the ``rebalancing'' the bank's governor, Mervyn King, predicts for the U.K. He says the economy will move away from consumer spending towards business investment and exports.
``There are beginning to be the signs there is a rebalancing in the economy, but only the very flickering of an early sign,'' King said in testimony to a committee of lawmakers on Nov. 24.
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