US, Europe find their feet as Asia data disappoint

Written by Agencies | New York/London/Beijing | Updated: Jul 2 2013, 07:32am hrs
US manufacturing activity grew in June, rebounding from an unexpected contraction the prior month, but hiring in the sector was the weakest in nearly four years. The Institute for Supply Management (ISM) said its index of national factory activity in June rose to 50.9 from 49.0 in May, a touch above of expectations of 50.5. But a measure of employment fell to 48.7, the lowest reading since September of 2009.

Meanwhile, Europes prolonged economic decline may have stabilised and even rebounded in some areas, business surveys showed earlier on Monday, although Asia exhibited signs of slowing as global demand wanes.

Any hint of economic 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 even among debt-strapped euro zone members. Spain, for example, appeared on the brink of growth.

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 both 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 euro zone can continue, said Evelyn Herrmann at

BNP Paribas.

Markits final Eurozone Purchasing Managers Index (PMI) rose to a 16-month high of 48.8 in June from Mays 48.3, just above an earlier flash reading of 48.7 but below the 50 level that divides growth from contraction for the 23rd month.

An index measuring output that feeds into the wider composite PMI, due out on Wednesday, jumped to 49.8, its highest level since February 2012, from 48.8.

Chinas 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.