Newspaper article The Journal (Newcastle, England)

Strong Pound Brings Chill to Industry

Newspaper article The Journal (Newcastle, England)

Strong Pound Brings Chill to Industry

Article excerpt

MANUFACTURERS ended 2006 on a low note, according to new figures which showed the sector had expanded at its slowest pace since March.

The Chartered Institute of Purchasing and Supply (CIPS) said its activity index for December stood at 51.9, a figure which was down from 52.5 in the previous month and below market expectations. A return above 50 represents expansion.

The disappointing news comes amid fears that the strength of the pound is hurting competitiveness among UK manufacturers.

The survey's new orders index registered its lowest level for four months, but there was encouragement on raw material costs after the rate of input price inflation came in at a 16-month low.

And with factory gate prices easing to an eight-month low, the report may alleviate concerns at the Bank of England that manufacturers were seeking to pass on recent cost increases.

The Bank is due to announce its next decision on interest rates on January 11. …

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