Asian and European industrial health under scrutiny this week

Sun Mar 9, 2014 3:09pm EDT
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By Jonathan Cable

LONDON (Reuters) - Europe's and Asia's industrial health will be closely watched in the coming week for an indication of how solid - or weak - a footing the global economy was on at the start of the year.

With China's leaders seeking to rebalance the world's industrial powerhouse more toward consumer spending, and with bad weather distorting most United States data since the start of the year, some clarity would be helpful.

After private sector business surveys suggesting services activity around the world is on the up, investors and policymakers will shift their focus to industrial production figures for the euro zone, Britain, Japan and China.

Industrial output growth in China, the world's second largest economy, is likely to have slowed further in January from 9.7 percent in December, hurt by weaker local and foreign demand.

Economists in a Reuters poll forecast a decline to a 9.5 percent annual pace, which is still strong and would not yet show the kind of rebalancing policymakers are looking for. Those figures are due on Thursday.

"China's export growth is likely to have softened in February after the surge in January due to the front-loading of exports before the Lunar New Year," said David Mann at Standard Chartered.

Beijing says it is aiming for economic growth of about 7.5 percent this year, compared with last year's actual expansion of 7.7 percent, as it seeks to revamp a maturing economy and move it towards slower but better-quality growth.

Germany, whose export-driven economy has been the driving force behind the 18-member euro zone's very slow recovery from recession, will also publish trade data this week.   Continued...

A labourer guides as slag is poured into a container at Dongbei Special Steel Group Co. Ltd. in Dalian, Liaoning province December 27, 2013. REUTERS/China Daily