Manufacturing growth caps strong first quarter, led by China
By Jonathan Cable and Saikat Chatterjee
LONDON/HONG KONG (Reuters) - Factories across Europe and much of Asia posted another month of solid growth in March, rounding off a strong quarter for manufacturers, even though exporters fear a rise in U.S. protectionism could snuff out a global trade recovery.
China led the way, with an official manufacturing index expanding at the fastest pace in nearly five years. Surveys on Monday also showed encouraging growth in Europe, Japan, India and much of emerging Asia.
In the euro zone, IHS Markit's final manufacturing Purchasing Managers' Index rose to its highly in nearly six-year high of 56.2 in March, far above the 50 mark that separates growth from contraction.
However, British manufacturers lost some momentum last month, as export orders grew more slowly and rising inflation cut into consumer demand.
Sterling's tumble following June's vote to leave the European Union helped manufacturers enjoy their fastest annual growth in three years during the final quarter of 2016 but the sector's PMI suggested growth slowed in the first three months of this year.
"Greater optimism about global growth prospects appears to be providing a boost, while the fall in the value of the pound post-Brexit is helping new orders," James Smith at ING said of the British PMI.
"Whilst the near-term outlook for manufacturing looks encouraging, it's possible that Brexit uncertainty will start to weigh more heavily on sentiment over coming months."