Global factories had bumper November but growth may have peaked

Thu Dec 1, 2016 9:19am EST
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By Jonathan Cable and Saikat Chatterjee

LONDON/HONG KONG (Reuters) - Manufacturers around the globe performed strongly in November, but concerns about the protectionist leanings of U.S. President-elect Donald Trump and an OPEC-induced oil price rally could curtail future growth.

Factories across Asia and Europe ramped up activity and data due later on Thursday from the United States are expected to show manufacturers in the world's largest economy also pushed harder on the accelerator.

But some analysts cautioned November might be as good as it gets as the effects of vast monetary stimulus from central banks wear off.

"The strength in PMI numbers is unlikely to be sustained as much of it can be explained by previous stimulus measures," said Julian Evans-Pritchard at Capital Economics.

Policymakers at the European Central Bank are expected to announce an extension to their asset purchase program when they meet next week even after euro zone manufacturers enjoyed their best month in November since the start of 2014 and inflationary pressures, while still mild, picked up.

IHS Markit's final manufacturing Purchasing Managers' Index for the euro zone chalked up its highest reading since January 2014 in November, registering 53.7, in line with an earlier flash estimate and ahead of October's 53.5. Anything above 50 indicates growth.

But British manufacturing growth cooled unexpectedly as factories grappled with soaring costs caused by the slump in sterling after Britain voted to leave the European Union. The weaker pound also failed to boost export orders as much as in previous months.

The Markit/CIPS UK PMI fell to 53.4 from 54.2, confounding expectations for a rise to 54.5 in a Reuters poll of economists.   Continued...

A worker walks inside the China Steel Corporation factory, in Kaohsiung, southern Taiwan August 26, 2016. REUTERS/Tyrone Siu/File Photo