Factory activity slows worldwide

PMIS show euro zone set for new recession

FACTORY output in Europe and Asia wilted again in September, flagging a return to recession for the euro zone and a seventh consecutive quarter of slowing growth in China, business surveys showed yesterday.

The data showed companies across the world have yet to feel the benefit of aggressive monetary stimulus launched by the major central banks over the past two months.

While hinting the downturn will not get much worse in China and some large European countries, the latest purchasing managers indices (PMIs) showed the global economy concluded the third quarter in largely downbeat style.

Data are expected to show that factories in the US, like their Asian counterparts, are feeling the ill effects from the global slowdown radiating from Europe.

Euro zone factories suffered their worst quarter since the dark days of early 2009, when major economies were steeped in the worst recession since World War Two. There was nothing to suggest any of its major economies will do anything other than contract for months to come.

“This is something that is going to persist into the fourth quarter,” Nomura euro area economist Nick Matthews said. “Even when you look at some of the forward-looking [PMI] indicators, they’re extremely weak for the area as a whole. The position still looks extremely vulnerable.”

Although there were signs that the downturn started to ease in German, Italian and