Global factory growth picks up but Europe diverging
Published 02/12/2013 | 13:48
Increasing demand for manufactured goods drove global factory activity higher last month but the spurt in the euro zone masked a widening disparity among some of the bloc's key members.
As year-end approaches, the global economy is showing signs of a more solid recovery, with encouraging signs from some economies, particularly Britain, of an acceleration.
But growth in Europe's 17-nation currency union remains weak and Markit, compiler of the monthly Purchasing Managers' Indexes, said on Monday that there was evidence of a renewed downturn in France and Spain.
Markit's Eurozone Manufacturing PMI rose to 51.6 last month from October's 51.3, a two-year high, just pipping an earlier flash reading of 51.5, and the fifth consecutive month showing growth. The output index nudged up to 53.1 from 52.9.
"It is coming from a pretty low level," said Ben May at Capital Economics. "Signs of weakness in France is clearly a worry and suggests that the divergence between it and Germany remain firmly in place. It would raise more concerns if it were to continue or intensify."
France's PMI fell to a five-month low of 48.4 from 49.1, chalking up its 21st month below 50, while Spain's sank back below the 50 break-even mark after spending the last three months in growth territory.
By contrast, data from Germany, Europe's biggest economy, showed factories there had their best month since mid-2011. Italian figures showed manufacturing there also picked up speed.
The euro zone escaped from its longest-ever recession earlier this year, supported by better-than-expected growth in Germany, but a Reuters poll last month suggested the bloc's economy will grow only moderately though next year.
A similar indicator for Britain, outside the euro zone, was much stronger. At 58.4, it easily topped the highest forecast and is showing the strongest growth in nearly three years.
Data due later from the United States, the world's biggest economy, is expected to show an easing from October's 2-1/2 year record.
Chinese PMIs suggested resilience that augurs well for Beijing's plans to gear the economy more towards domestic consumption and away from investment-led growth. Beijing has said it will accept lower economic growth to achieve the shift.
The HSBC/Markit China PMI edged down to 50.8 in November from a seven-month high of 50.9. China's official PMI released at the weekend, which focuses more on bigger firms, held at 51.4 in November, unchanged from October's 18-month high.
"The more forward-looking parts of the reports, however, imply some moderation of economic activity further down the road, underpinning our view that Chinese economic growth may have peaked in the third quarter," said Nikolaus Keis at UniCredit.
The HSBC survey showed new export orders growth dipped to a three-month low, but the official PMI showed an acceleration.
Japan's PMI, released on Friday, pointed to the quickest manufacturing growth in more than seven years as new export orders reached their highest level in over three.
Prime Minister Shinzo Abe has overseen massive monetary and fiscal stimulus this year to revive the economy, which has now grown in the past four quarters.
Factory activity in India expanded after three months of contraction as new orders grew for the first time since May, supporting government figures on Friday that suggested an economic slump may have bottomed out.