Chinese factories grow again, but U.S. sector shrinks
By Steven C. Johnson and Andy Bruce
NEW YORK/LONDON (Reuters) - Chinese manufacturing output grew last month for the first time in more than a year but a surprise contraction in U.S. factory activity tempered optimism about the health of the world economy on Monday.
Business surveys also showed the euro zone's manufacturing sector shrank for a 16th straight month, though a little less rapidly than in October.
A rise in HSBC's China manufacturing PMI to 50.5 in November, its first time above the 50-point growth threshold in 13 months, suggested the world's second-biggest economy may be heading into 2013 with more momentum after struggling this year.
The expansion in Chinese factory activity should provide a boost for world growth, particularly since recovery in the debt-strapped euro zone still appears a long way off.
Yet the outlook elsewhere in Asia, including India and South Korea, was less encouraging. And in the United States, manufacturing shrank in November, turning in its worst showing in more than three years.
"The overall picture is certainly one of a weak global economy," said Joshua Shapiro, chief U.S. economist at MFR, a global consulting firm. "U.S. manufacturing is suffering from weak domestic demand and soft exports. Europe is weakening clearly, Japan is going nowhere, and I don't know what to make of the wiggles in Chinese economic data."
The U.S. Institute for Supply Management said its index of factory activity fell to 49.5 from 51.7.
That added to worries about the world's largest economy, particularly ahead of a possible budget crisis over tax and spending policy at year end. Continued...