Europe at 16-month high but Asia starting to slow down
Europe's prolonged economic decline may have stabilised and even rebounded in some areas, a number of surveys have shown.
But Asia is exhibiting signs of slowing as global demand wanes.
Any hint of recovery in Europe will be welcomed by the European Central Bank, which has come under pressure to take more action to help bring a quicker end to a year-and-a-half-long recession.
There were encouraging signs in the surveys yesterday even among debt-strapped eurozone members. Spain, for example, appeared on the brink of growth.
Here, the manufacturing sector grew for the first time in four months during June.
Outside the currency bloc, British manufacturing grew at its fastest pace in more than two years.
But a cheerless outlook for China was repeated across Asia as manufacturers faced belt-tightening by consumers from abroad and at home – which some analysts fret bodes poorly for Europe as it tries to find its footing.
"Global manufacturing is showing signs of renewed weakness. With not very strong momentum in China, we wonder if this trend in the eurozone can continue," said Evelyn Herrmann at BNP Paribas.
Markit's final eurozone Purchasing Managers' Index (PMI) rose to a 16-month high of 48.8 in June from May's 48.3, but below the 50 level that divides growth from contraction for the 23rd month.
It comes after more positive news on the Irish front, with the latest Investec Manufacturing PMI climbing to 50.3 in June.
China's official PMI, however, showed factory growth stalling last month while a similar private survey offered a bleaker picture and showed activity tumbling to a nine-month low.
"The Chinese economy is far from out of the woods.
"A few sub-indicators of the PMI have long indicated that the economy is in sharp distress," said Xianfang Ren, an economist at IHS.
And the world's biggest economy, the United States, saw manufacturing activity edged to expansion last month but factory employment weakened.
The Institute for Supply Management manufacturing PMI rose to 50.9 in June from 49.0 in May. (Reuters)