Upbeat PMIs add to global optimism

Bumper orders in China and Europe

LONDON: A flood of new orders gave a boost to European and Chinese firms in September, according to a clutch of surveys which added to evidence that the global economy is healing.

Upbeat purchasing managers’ indexes, surveying thousands of companies across the globe, come ahead of figures for the US factory sector which are expected to show the world’s largest economy is also continuing to recover.

‘‘The global economy is gathering momentum ... growth is strengthening. Euro zone economies are gradually emerging into a recovery that is sustainable,’’ said Philip Shaw at Investec. ‘‘(And) it’s fairly clear from its performance so far in 2013 that the US recovery has gained some traction in the face of some fairly heavy fiscal challenges.’

Survey firm Markit’s Euro Zone Flash Composite Purchasing Managers’ Index (PMI) jumped to 52.1 from last month’s 51.5, its highest since June 2011 and beating expectations for a reading of 51.9. A reading above 50 indicates growth. The pace of expansion in the bloc’s dominant services sector also beat all forecasts in a Reuters poll and the surveys suggested the recovery was becoming more broad-based.

Business at firms in Germany, Europe’s largest economy, expanded at a faster pace than last month and in France, the second biggest, activity increased — albeit marginally — for the first time in 19 months.

Markit Economics said yesterday that the composite PMI, which surveys both manufacturing and service sector companies across the region and is seen as a good guide to economic growth, pointed to a 0.2% expansion this quarter, matching a Reuters poll taken earlier this month.

‘‘Today’s PMI figures support the view that the euro zone recovery is gradually becoming more entrenched and, as such, further reduce the odds that the ECB will follow up its forward guidance rhetoric with action,’’ said Martin van Vliet at ING Bank.

New business in the bloc increased again this month, boding well for October activity, and it was a similar story in China where new export orders jumped to a 10-month peak.

Encouragingly, domestic demand also showed resilience, with new orders rising to a five-month high.

The Chinese flash HSBC PMI climbed to 51.2 this month from August’s 50.1, hitting a high not seen since March.

A breakdown of the data showed ten of 11 sub-indices rose in September.

‘‘Today’s figure adds to the raft of recent better-than-expected Chinese data, indicating that the growth slowdown has already run its course and industrial activity is gaining traction,’’ said Nikolaus Keis at UniCredit Bank.

In July and August there were concerns that growth could be slower than the government’s target of 7.5%, which would already be the slowest growth in more than two decades.

Most analysts now say the 2013 target will be met.