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Global economy accelerates in June
Written by: PaxForex analytics dept - Tuesday, 26 February 2013 0 comments
Global manufacturing activity appeared to accelerate in June, buoyed by a return to growth in China and Japan and the fastest expansion in the U.S. factory sector in more than four years.Surveys of manufacturers around the world released earlier gave some positive signals for the global economic outlook, but dark clouds remained over Europe, where an unexpectedly sharp fall in French business activity dragged on the wider euro zone. The data suggested Beijing's targeted stimulus measures and Japan's improving labor market were helping domestic demand in Asia's dominant economies. The HSBC/Markit Flash China Manufacturing Purchasing Managers' Index rose more than expected to 50.8 in June from 49.4 a month earlier. The 50-point level separates growth in activity from contraction. China's government has unveiled a series of modest measures to support economic growth in recent months, including reserve requirement cuts for some banks that could encourage lending. The Markit/JMMA flash Japan Manufacturing PMI also rose in June, hitting 51.1 and showing the first growth in three months. External demand remained weak for the two export powerhouses, and some analysts think China may need more stimulus to offset a cooling housing market and avoid a sharp slowdown in economic growth. Japan's weak exports also take the gloss off the government's efforts to breathe new life into
its economic reform agenda. But in a more positive sign for global demand, U.S. factories showed their strongest growth in activity since May 2010, with Markit's preliminary PMI rising to 57.5. While the data was generally positive for the factories of the world's biggest economies, there were more worrisome signs within Europe. Germany and France went their separate ways again, with German business activity expanding robustly, albeit at a slower pace than last month, while France's private sector shrank at the fastest rate in four months. Markit's composite PMI, based on surveys of thousands of companies across the 18 countries that use the euro, fell to 52.8 from May's 53.5. The agency said that with a robust recovery taking place in some euro zone periphery countries, the data still point to second-quarter economic growth of 0.4 percent. Germany, Europe's largest economy, was again the driving force although its composite PMI eased to 54.2, while the French index slumped to 48.0, its lowest reading since February. Also somewhat worryingly for the European Central Bank, a composite PMI sub-index measuring output prices held below the 50 mark for the 27th month, coming in at 49.7 as firms kept cutting prices despite soaring input costs. Inflation in the euro area slowed to just 0.5 percent in May, prompting the ECB to cut interest rates to record lows and offer new long-term loans to banks.