A member of staff works on a car production at the Morgan Motor Company factory in Malvern, Britain, May 12, 2023. REUTERS/Andrew Boyers

LONDON, Dec 1 (Reuters) - Britain's manufacturing sector recorded its first increase in activity since September 2024 last month, bolstered by improved domestic demand and less of a slowdown in orders from overseas, a survey showed on Monday.

The S&P Global Purchasing Managers' Index for Britain's manufacturing sector rose to 50.2 in November from 49.7 in October, in line with an initial 'flash' reading that painted a weaker picture of the rest of the private sector.

"November saw a stabilisation in new business following a 13-month sequence of contraction. Manufacturers experienced a boost from improved sales to the domestic market, while the rate of contraction in new export business eased to a 12-month low," S&P said in a statement.

Britain's most recent official data showed manufacturing output in the third quarter of the year was 1.0% lower than the year before, hurt by a cyberattack that halted production at carmaker Jaguar Land Rover.

S&P said overall growth in manufacturing was weak as the only area to see higher production volumes was investment goods, while consumer goods and intermediate goods production fell and only larger manufacturers reported any expansion.

Employment continued to decline, albeit by the joint-smallest amount in a year, while manufacturers' selling prices fell for the first time since October 2023.

Businesses blamed job losses partly on higher labour costs - including April's 7% increase in the minimum wage and higher employer social security contributions - as well as reduced backlogs of work.

Nonetheless, business optimism rose to a nine-month high and some manufacturers expressed hopes that the use of artificial intelligence and the construction of data centres would either boost their own competitiveness or stimulate demand from their customers.

The survey was conducted before finance minister Rachel Reeves delivered her annual budget on November 26, when she raised taxes by 26 billion pounds ($34 billion) but spared businesses to a greater extent than in her first budget in October 2024.

($1 = 0.7548 pounds)

(Reporting by David Milliken; Editing by Toby Chopra)