Global factories parched for demand, need stimulus

Mon Feb 1, 2016 11:54am EST
 
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By Jonathan Cable and Wayne Cole

LONDON/SYDNEY (Reuters) - January surveys of global factory activity released on Monday showed the new year began much as the old one ended, with too much capacity chasing too little demand.

Global manufacturing expansion accelerated slightly but remained weak at the start of 2016 as faster growth in developed markets failed to offset a contraction in emerging economies.

JPMorgan's Global Manufacturing Purchasing Managers' Index (PMI), produced with Markit, came in at 50.9 last month, just above December's 50.7. The index has been above the 50 mark that separates growth from contraction since late 2012."The January PMI data signal that the upturn in global manufacturing remained lackluster at the start of 2016," said David Hensley, director of global economic coordination at JPMorgan.

Stock markets and oil prices have been battered since the start of the year by concern the Chinese economy, the world's second-largest, is struggling.

Such concern has eroded expectations for how quickly the Federal Reserve will raise U.S. interest rates, after its first increase in almost a decade in December.

ASIAN WOES

China was again the epicenter of disappointment. The official measure of manufacturing fell to its lowest since mid-2012. The weakness also encompassed such bellwethers of high-tech trade as South Korea and Taiwan.   Continued...

 
An employee works inside a silk factory in Neijiang, Sichuan province, July 3, 2013. REUTERS/China Daily