US, Asian factory output eases but Europe shows sturdy rise
CHINA MANUFACTURING ACTIVITY AT THREE-YEAR LOW, OFFICIAL SURVEY SHOWS
US manufacturing contracted in November for the first time in 36 months as the sector buckled under the weight of a strong dollar and deep spending cuts in the energy sector.
But the economy remains on firmer ground, with other data yesterday showing a sturdy increase in construction spending in October as outlays rose across the board.
The Institute for Supply Management said its national factory index fell to 48.6 last month, the first contractionary reading since November 2012, from 50.1 in October. While a reading below 50 indicates a contraction in manufacturing, the index remains above 43.1, which would signal a recession.
Manufacturing, which accounts for 12 per cent of the economy, has been hammered by dollar strength and the spending cuts by energy firms.
The dollar has gained 18.1 per cent against the currencies of the United States’ main trading partners since June 2014.
Asia manufacturing falls
Manufacturing activity across much of Asia deteriorated in November and while European factories’ reports improved, the region struggled to gather momentum. Business surveys yesterday showed few signs of vigour across trade-reliant Asia, apart from Japan, with sluggish demand at home and abroad forcing manufacturers from China to Indonesia to throttle back production, cut selling prices and shed more jobs.
Eurozone manufacturing growth picked up to a 19-month high in November but the pace was still relatively modest and with firms cutting prices for a third month, expectations for further easing from the European Central Bank tomorrow will solidify.
China’s official PMI fell for a fourth month in a row in November, hitting its lowest since August 2012, as new export orders dropped for the 14th month. A private survey, the Caixin/Markit China PMI, which focuses on small and mid-sized companies, edged up to its highest reading since June, but still pointed to a ninth month of contraction.