Global factory business activity grew at its fastest pace in nearly four years in December as new orders growth accelerated at a rate not seen in more that five and a half years, a survey showed on Monday.

The global index, produced by JP Morgan with research and supply management organizations, rose to 55.0 in December from 53.7 in November. The new orders index also rose sharply, to 58.6 from 56.7, a level not seen since May 2004.

December PMI data indicate that the global manufacturing sector approaches 2010 on a positive footing, said David Hensley, a director at JP Morgan.

The output index reached 58.2 in December from 56.8 in November, just shy of October's 63 month high of 58.3, led by Asia, the United States and Britain.

The employment index reached 50.2 last month from 49.4 in November, the first time it has been positive since March 2008, driven by emerging markets such as China, Taiwan and South Korea. Staffing levels fell in all the western European nations covered by the survey, but the rates of decline were slower than the previous month.

If a rebound in the manufacturing labor market can be maintained, this should aid with sustaining the broader recovery. Price pressures are rising, but mainly as a result of the improving economic climate, Hensley said.

The price index rose sharply to a 15-month high of 58.5 last month, mainly as a result of higher commodity prices, with the sharpest rates of cost inflation seen in China and Taiwan.

Earlier data from Asia showed Chinese manufacturing activity expanded at the fastest rate on record in December and the recovery among European manufacturers, led by Britain, gathered pace.

The Institute for Supply Management said the U.S. manufacturing sector grew for a fifth month in December, with the index hitting its highest level since April 2006.

The index combines survey data from countries including the United States, Japan, Germany, France, Britain, China and Russia.

(Reporting by Jonathan Cable; Editing by Ron Askew)

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