The Star Late Edition
Global PMIS lift despite European gloom
MANUFACTURING from the UK to India showed improvement in December, suggesting production is weathering strains from Europe’s sovereign debt crisis.
Purchasing managers’ indices (PMIS) for the UK, Switzerland, China, India and Australia rose in the month, while German unemployment fell more than economists forecast as exports of vehicles and machinery boomed, reports showed yesterday.
US manufacturing growth is expected to have accelerated to the fastest pace in six months.
The factory production data indicate some resilience in the industry as European leaders work to flesh out their plan to end the debt turmoil that is threatening to drag the region back into recession.
The International Monetary Fund may cut its 2012 global growth forecast this month after lowering it to 4 percent in September, when it predicted “severe” repercussions if Europe failed to contain its crisis.
“Everyone’s taking comfort from stronger exports to the Far East, but we’re going to see a much weaker first quarter in China,” said Chris Scicluna, Daiwa Capital Markets Europe’s head of economic research in London.
A manufacturing PMI for India, released by HSBC Holdings and Markit Economics yesterday, advanced to the highest level in six months in December. In China, manufacturing rebounded last month from a contraction in November, while Australian factory production expanded for the first time since June, driven by gains in basic metals, transport and publishing.
Manufacturing in Singapore rose 6.5 percent from a year earlier in the fourth quarter, after rising 13.4 percent in the previous quarter.
In Europe, a gauge of Swiss manufacturing rose to 50.7 in December from 44.8 in November when adjusted for seasonal swings, Credit Suisse Group said yesterday. That was the first above 50 since August.
A UK index rose to 49.6 from a revised 47.7 and a measure of new export orders increased for the first time in five months, led by demand from Germany, eastern Europe and China.
The UK reading offered “glimmers of hope”, said David Tinsley, an economist at BNP Paribas. “As we enter 2012, hopes that the manufacturing recession will be fairly shallow continue to have credence.”
European stocks rose yesterday, with the Stoxx 600 index gaining 0.7 percent as of 12.05pm in London. In Germany, the DAX index advanced 1 percent, for its longest winning streak since November 30.
General Electric is targeting more than 10 percent earnings growth at its industrial and finance businesses next year, in part by driving up margins in manufacturing businesses. Chief executive Jeffery Immelt said last month that the firm was prepared for a “tough Europe” though it would manage strains by reducing its footprint there. – Bloomberg