China factories scent hint of spring, Europe still chilly, U.S. improves
By Jonathan Cable and Wayne Cole
SYDNEY, LONDON, NEW YORK (Reuters) - Activity in China's factory sector grew for the first time in nine months during March to bring a hint of spring to the global economy, although growth remained weak in Europe, and subdued in the U.S.
Headlining in Asia was a rise in the official version of the Chinese Purchasing Managers' Index (PMI) to 50.2, above the 50-point mark that separates growth from contraction.
The private Caixin/Markit PMI found output, total new orders and output prices all returned to growth also, while a survey of the service sector surprised with its strength.
"It does seem to indicate that the manufacturing sector is warming up a bit," said Raymond Yeung, senior economist at ANZ in Hong Kong.
"We think there are basically two factors driving the recovery: the first is a possible acceleration in infrastructures pending. The second is a broader pickup in external demand."
The relatively upbeat Chinese surveys should give some comfort to Federal Reserve Chair Janet Yellen who this week cited the global risks emanating from Asia as one reason to be cautious on raising U.S. interest rates.
Yet, analysts still suspect more government support will be needed for the Chinese economy, especially if it wants to avoid a politically unsettling rise in unemployment.
Credit ratings agency Standard & Poor's underlined the need for faster reform when it changed China's credit outlook to negative on Thursday. Continued...