U.S., euro zone activity up; China decline slows

Wed Apr 23, 2014 10:37am EDT
 
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By Rodrigo Campos and Jonathan Cable

NEW YORK/LONDON (Reuters) - The U.S. manufacturing sector expanded in April and the euro zone private sector started the second quarter on its strongest footing since 2011, while the pace of decline in Chinese factory activity slowed, surveys showed on Wednesday.

Factory activity continued to expand in the world's largest economy, but the pace of growth stalled and came in below expectations. However, output growth hit its fastest in three years.

Financial data firm Markit said its preliminary or "flash" U.S. Manufacturing Purchasing Managers Index dipped to 55.4 in April from 55.5 in March. Economists polled by Reuters expected a reading of 56.0.

"The headline number is not bad. It's still above the 50 neutral threshold. The improvement is encouraging," said Ryan Sweet, senior economist with Moody's Analytics in West Chester, Pennsylvania.

"With this report, it suggests the manufacturing is gaining more orders and has bounced back from the bad winter weather. Manufacturers are playing catching up."

The data highlights expectations for a strong second quarter after the first one saw colder-than-average temperatures and massive snowstorms weigh on U.S. economic activity.

Earlier on Wednesday, data showed China's HSBC/Markit flash PMI for April rose to 48.3 from March's final reading of 48.0, but was still below the 50 line separating expansion from contraction.

"It's generally in line (with expectations), reflecting that growth momentum is stabilizing," said Zhou Hao, China economist at ANZ in Shanghai.   Continued...

 
Employees work on the production line of a wine bottle cap factory in Ganyu county, Jiangsu province May 6, 2013. REUTERS/China Daily