Latest data released by Markit - 4 January 2021

The preliminary release can be found here. Little change to the initial reading as the final print reaffirms that UK factory conditions hit a three-year high in December. A lot of this owes to Brexit stockpiling and supply chain disruptions though. Markit notes that:

"The Manufacturing PMI rose to its highest level in over three years in December, mainly reflecting a boost from last-minute preparations before the end of the Brexit transition period. Customers, especially those based in the EU, brought forward purchases, boosting sales temporarily. It seems likely that this boost will reverse in the opening months of 2021, making for a weak start to the year. Note also that the December PMI data were collected prior to the border closures, which will have led to further logistics and production disruptions for many companies.

"Worryingly, the manufacturing sector was already beset by near-record supply-chain delays even prior to the closure of Dover-Calais shipping. Manufacturers reported freight delays - especially at ports - plus shortages of certain raw materials and a lack of supplier capacity. Vendor lead times, a bellwether of supply-chain pressures, lengthened in December to a similar extent to during the first wave of the pandemic.

"UK manufacturers also built-up input stocks to one of the greatest extents in the 29-year survey history in expectation of heightened logistics issues continuing during the first part of 2021. If this is the case, as expected, the disruption to deliveries and production schedules, alongside the unwinding of Brexit inventories, may place the manufacturing recovery under greater threat in the coming months."