Global factory growth lost momentum in March: PMI

Global manufacturing growth lost momentum last month as new orders came in at a slower pace but factories increased staffing to meet the continued expansion, a business survey showed on Tuesday.

JPMorgan’s Global Manufacturing Purchasing Managers’ Index (PMI) dipped to 52.4 in March from 53.2. It held above the 50 mark that indicates growth for the 16th month.

“Although growth is cooling from the highs reached at the end of last year, the picture remains one of continued expansion, suggesting manufacturing will remain a contributor to both global economic growth and job creation,” said David Hensley, a director at JPMorgan.

A sub-index measuring employment rose to 51.5 from 51.3. The new orders sub-index sank to 53.2 from 54.6.

Manufacturing activity in Asia and Europe finished the first quarter on a weaker note but activity in the United States remained relatively steady, suggesting severe winter weather in North America had only a modest effect on U.S. factories. Factories across Europe eased back on the throttle in March while China’s vast manufacturing industry contracted for a third straight month, surveys showed, fueling expectations policymakers may be forced to act in coming months.

The performance in the U.S. contrasts with the lackluster data elsewhere and arguably gives U.S. monetary authorities more room to reduce stimulus than their central banking counterparts abroad, who are trying to prop up growth.

The two U.S. surveys, one from Markit and one from the Institute for Supply Management, contradicted each other in spots, but both overall figures were solidly above 50, indicating ongoing growth.

“It is consistent with an economy making progress but one growing between 2 and 2.5 percent,” said Richard Franulovich, senior currency strategist at Westpac Banking Corp in New York.

“That’s respectable but not as much as the Fed would like.”

U.S. markets judged the news as positive.