Global factory growth stumbles as demand falters

Mon Mar 3, 2014 6:19am EST
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By Jonathan Cable and Adam Rose

LONDON/BEIJING (Reuters) - Manufacturers across Europe and Asia changed down a gear last month as falling demand from abroad hurt Chinese output and European factory growth dipped from January's 2-1/2 year high.

But while the surveys across Asia were more downbeat, data from the euro zone showed output rose in all of the bloc's four biggest economies for the first time in almost three years.

"They are all building up to a picture which says it's going to be okay but nothing particularly stellar. They are not helping the case for a decent pick-up in the first half of the year," said Peter Dixon at Commerzbank.

Markit's final Eurozone Manufacturing Purchasing Managers' Index (PMI) came in at 53.2 last month, up from a flash reading of 53.0 but below January's 54.0 - which was the highest since May 2011. A reading above 50 indicates growth in activity.

The index measuring manufacturing output, which feeds into a composite PMI that is seen as a good gauge of growth, dipped from January's 33-month high.

"(This) reinforces suspicion that it is going to be far from plain sailing for the euro zone in 2014," said Howard Archer at IHS Global Insight.

"While the euro zone may be establishing modest growth, it is still finding it hard to build up momentum."

Gross domestic product across the region expanded 0.3 percent in the final three months of last year, thanks to stronger expansion in France and Germany, and is expected to match that pace each quarter this year.   Continued...

Containers are seen at a port of Shanghai Free Trade Zone, February 11, 2014 file photo. REUTERS/Aly Song