The measure of output rose to 54.1 from 53.7, while new orders increased to 54.6 from 53.9. Companies said the increased demand was partly due to spending in the energy sector, which is recovering from the oil price crash more than two years ago.
New orders for exports also saw modest growth, rising to 50.6 from 49.4, with manufacturers pointing to improving global economic conditions. Meanwhile, backlogs of work continued to grow, with the index at a nearly three-and-a-half-year high of 52.4 from November's 51.8. Manufacturers were somewhat upbeat about the year ahead with 36 percent of those surveyed expecting output volumes to rise in 2018, compared to 7 percent who anticipate a decline.