Global economy starts second half on solid footing: PMIs
(Reuters) - China's factory activity expanded at its fastest in 18 months in July, while the euro zone's private sector also perked up, but the pace of U.S. manufacturing expansion slowed.
While China is relying on increased government stimulus to steer its economy away from reliance on exports and towards consumer spending, Europe has taken the opposite approach, combining fiscal austerity with near-zero interest rates, and the U.S. is beginning to wind down its monetary expansion.
The latest HSBC/Markit Flash China Manufacturing Purchasing Managers' Index on Thursday rose to 52 in July from 50.7, the highest reading since January 2013, and well above the 50-point level that separates growth from contraction.
A comparable survey of private sector activity in the euro zone also rose more than expected, to 54.0 from 52.8, with inflation remaining lows.
"The strength of this morning's data from China and the euro zone offers some encouragement that there is some momentum building for the global economy at the start of the third quarter," said Mark Wall, European economist at Deutsche Bank.
However, the pace of expansion in the U.S. manufacturing sector eased in July with new orders and employment also growing more slowly, according to private data vendor Markit on Thursday.
The preliminary U.S. Manufacturing Purchasing Managers Index was 56.3 in July, down from the June reading of 57.3 and below analyst expectations for a reading of 57.5.
The output subindex dipped slightly, to 60.4 from 61 in June, a level that had been its highest since April 2010. The employment gauge fell to its weakest level since September, dropping to 51.2 from 54.
"The (U.S.) data suggest the sector is growing at an annualized rate of roughly 8.0 percent as we moved into the second half of the year," said Chris Williamson, chief economist at Markit. Continued...