Global manufacturing activity grows

Global manufacturing activity increased for the third straight month in January as growth in India and the United States offset a very weak performance in much of the euro zone, a report showed on Thursday. The Global Manufacturing Purchasing Managers' Index (PMI), produced by J.P. Morgan with research and supply management organisations, fell to a 51.1 in February from January's 51.3.
But it was the third month the index has held above the 50 mark that divides growth from contraction. Factories faced rapidly rising input costs from higher oil prices and associated increases of by-products, energy and transport, J.P. Morgan said. Despite the higher costs firms continued to increase their workforce, with the employment subindex at 51.1, marking its 27th month above 50.
The pace of growth in the US manufacturing sector unexpectedly slowed last month, breaking a three month trend of quickening growth. The eurozone's manufacturing sector contracted for the seventh straight month in February, with factories in the bloc's struggling indebted states facing some of the toughest conditions on record, earlier data showed.
Markit's Eurozone Manufacturing Purchasing Managers' Index (PMI) rose to 49.0 last month from January's 48.8, in line with a flash reading but has now been below the 50 mark that divides growth from contraction since July. But Britain's manufacturers reported further growth in February, despite a slight slowdown, as did those in China and India.
The Markit/CIPS Manufacturing Purchasing Managers' Index (PMI) ticked down to 51.2 from a slightly downwardly revised 52.0 in January, which was the highest level since May, data compiler Markit said on Thursday in London. The index combines survey data from countries including the United States, Japan, Germany, France, Britain, China and Russia.
BEIJING/BANGALORE: New factory orders for Asia's manufacturing powerhouses perked up in February, easing some concerns about the global economic slowdown, purchasing managers indexes showed on Thursday. China's factories grew more than expected in February as new export orders for big firms bounced back, according to a government purchasing managers index (PMI). The official PMI rose to 51.0, above expectations of 50.7 and higher than 50.5 in January.
Private sector PMIs on Thursday pointed to some improvements in factory activity in China, India and Taiwan, although in China it also showed smaller companies lagging a rebound at larger companies. HSBC's China PMI stood at 49.6, a shade higher than January's reading of 48.8, but still under the 50-point threshold demarcating expansion from contraction.
The manufacturing surveys, the first leads on factory activity in the region, offered tentative signs of a recovery from the slump in the final months of 2011 caused by faltering external demand and fragile business and consumer sentiment. However, the economic picture was far from complete.
"We're in that familiar period where business conditions indicators are improving while the hard data is yet to reflect that," said Robert Prior-Wandesforde, economist at Credit Suisse in Singapore. The HSBC PMI for Taiwan, one of Asia's most open economies which sits at the centre of many global technology chains, was starkly optimistic. The index rose to 52.7, marking the first expansion in factory output since May 2011, led by export orders.
India's manufacturing sector expansion eased back from its strongest pace in eight months for a PMI of 56.6 in February compared with 57.5 in January. However, new orders touched a 10-month high. Like in many countries though, official Indian data doesn't paint such a rosy picture. Growth in gross domestic product dropped to its slowest pace in nearly 3 years in the final quarter of 2011, with manufacturing and mining at the fore of the slowdown, figures showed on Wednesday.
South Korean data on Thursday showed exports for January and February combined grew just 6.8 percent, weak enough to underscore grim prospects for demand from debt-ridden Europe and the anaemic nature of US orders. The dual PMI surveys for China also revealed a divergence in export orders, with the government's new export orders sub-index rising to 51.1 in February, the first expansion in four months and the highest reading since May 2011.
But the HSBC PMI export sub-index slid to an eight-month trough of 47.5, suggesting orders were shrinking. China's economy posted its weakest growth in 2-1/2 years in the December quarter. Growth for 2012 is widely expected to the weakest in a decade.