Manufacturing picks up pace in leading economies; Europe lags

Mon Jun 23, 2014 11:54am EDT
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By Aileen Wang and Jason Lange

BEIJING/WASHINGTON (Reuters) - Global manufacturing activity appeared to accelerate in June, buoyed by a return to growth in China and Japan and the fastest expansion in the U.S. factory sector in more than four years.

Surveys of manufacturers around the world released on Monday gave some positive signals for the global economic outlook, but dark clouds remained over Europe, where an unexpectedly sharp fall in French business activity dragged on the wider euro zone.

The data suggested Beijing's targeted stimulus measures and Japan's improving labor market were helping domestic demand in Asia's dominant economies.

The HSBC/Markit Flash China Manufacturing Purchasing Managers' Index rose more than expected to 50.8 in June from 49.4 a month earlier. The 50-point level separates growth in activity from contraction.

"The authorities' mini-stimulus is filtering through to the real economy," said Qu Hongbin, chief economist for China at HSBC.

China's government has unveiled a series of modest measures to support economic growth in recent months, including reserve requirement cuts for some banks that could encourage lending.

The Markit/JMMA flash Japan Manufacturing PMI also rose in June, hitting 51.1 and showing the first growth in three months.

External demand remained weak for the two export powerhouses, and some analysts think China may need more stimulus to offset a cooling housing market and avoid a sharp slowdown in economic growth.   Continued...

Workers on the assembly line replace the back covers of 32-inch television sets at Element Electronics in Winnsboro, South Carolina May 29, 2014.  REUTERS/Chris Keane