Manufacturing expands in U.S, slows in China; euro zone gears up
By Jonathan Cable and Rodrigo Campos
LONDON/NEW YORK (Reuters) - U.S. manufacturing growth was solid in the first quarter and a return to expansion in French business activity this month suggested a recovery was taking shape in the euro zone, though China's factory sector stuttered in the early part of 2014, surveys showed.
The U.S. accelerated at a slower pace in March than the near four-year high hit in February, Markit's Flash Manufacturing Purchasing Managers' Index showed. Despite the dip to 55.5 in March from February's 57.1, the 55.4 average reading for the three first months was higher than last year's fourth-quarter average of 53.8.
Readings above 50 indicate expansion.
"Cooling in the March survey was expected because the February reading was the strongest since May 2010," said Daniel Silver, economist at JPMorgan in a research note.
"But even with the move down in the headline in March, it remained pretty solid and many of the underlying details also looked strong."
Weaker-than-expected readings from China meanwhile pointed to a contraction in the first three months of the year and will raise market expectations of government stimulus to arrest a loss of momentum in the world's second-largest economy.
"It tells you something about the extent to which market concerns about a slowdown in China are justified," said Peter Dixon at Commerzbank. "In the euro zone, the economy is bowling along at a reasonable pace."
A solid expansion in both the euro zone's manufacturing and services industries in March, and growth in its second-biggest economy France, meant the bloc's recovery pace barely slowed from February's 2-1/2-year high. Continued...