Euro­pean fac­to­ries en­joy buoy­ant month in June

Pakistan Observer - - ECONOMY WATCH -

LON­DON/SYD­NEY—Fac­to­ries across Europe en­joyed a buoy­ant month in June but that growth could be un­der threat after Bri­tons voted to leave the Euro­pean Union last week, sur­veys con­ducted al­most en­tirely be­fore the his­toric ref­er­en­dum showed. High­light­ing another wor­ry­ing trend for the global econ­omy, China’s vast fac­tory sec­tor flat­lined as ex­ports shrank and jobs were cut, in a slow­down across Asia that could lead to yet more pol­icy stim­u­lus as doubts grow over the po­tency of mea­sures taken so far. The hard times sig­nalled by a range of sur­veys was not what the world needed a week after Bri­tain voted to leave the EU, con­demn­ing the bloc to months if not years of po­lit­i­cal and eco­nomic in­sta­bil­ity.

“The unimag­in­able has hap­pened and the UK vote will cast a long shadow over the UK, Europe and global mar­kets for some time to come,” warned West­pac head cur­rency strate­gist Robert Ren­nie. “A struc­turally weaker pound, a softer euro and weaker global growth beck­ons.” Markit/CIPS re­ported a sur­pris­ingly strong read­ing of 52.1 in June for their UK Man­u­fac­tur­ing Pur­chas­ing Man­agers’ In­dex (PMI), up from May’s 50.4. That was the strong­est read­ing since Jan­uary and bet­ter than all fore­casts in a Reuters poll of econ­o­mists, which pro­duced a con­sen­sus view of 49.9. But data com­pany Markit warned “al­most all” the data from man­u­fac­tur­ers used in its sur­vey were re­ceived be­fore the June 23 ref­er­en­dum.—AP

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