British manufacturing activity grew more slowly than expected in November and there were signs that the sector's fledgling recovery might have lost some pace, the latest purchasing managers' data show today.
Economists were relatively relaxed about the data, however, saying the report was still consistent with the economy growing in the fourth quarter and that a slowdown in manufacturing growth was common after a brief spurt when contraction ended.
The headline PMI index fell to 51.8 from October's downwardly revised 53.4, confounding economists' expectations of a small increase to 54, according to data from the Chartered Institute of Purchasing and Supply and Markit Economics.
The headline index has been above the 50 level that divides growth from contraction for four of the last five months.
In October, both the headline index and the output component hit their highest levels in nearly two years. But both measures declined in November, and there was also a marked drop in the new orders index, which fell to 53 from 58.
Survey compilers Markit said there were indications that an initial spurt in manufacturing growth recorded in the survey could be coming to an end.
'We may be nearing a growth peak, as the new orders to inventory ratio fell sharply,' Rob Dobson, senior economist at Markit, said.
This ratio, which Markit views as a leading indicator for output growth, hit a record high in October but in November fell to its lowest since March, ending an upward trend broadly in place since the start of the year.
'The upturn is being driven by a recovery in new orders, reflecting rising levels of business-to-business and consumer spending, but the investment goods sector remains a drag on overall expansion,' the economist added.
The figures pointed to a 0.6% rise in manufacturing output in the three months to November, Markit estimated. A lack of demand for investment goods remained a weak spot, dragging down both the output and new orders index.
There was good news from exports, however, with the weakness of sterling increasing new orders from mainland Europe, the US and Asia and helping take this component to its highest level in almost two years.
But costs for metals, oil and plastics - most of which are imported - increased and manufacturers raised prices for the first time in 10 months to protect margins in the face of these higher raw material costs.
Manufacturing employment fell for a 19th successive month, albeit at the slowest pace since May 2008 and with some firms starting to rehire because of better sales and rising production.
