WASHINGTON/LONDON: Euro zone factories sank deeper into recession in December as new orders tumbled, business surveys showed on Wednesday, a sharp contrast to continuing signs of revival in the United States and China.
US factory activity rebounded last month after an unexpected contraction in November, adding to signs of momentum in the world's largest economy as 2012 ended. The Institute for Supply Management's index of US factory activity rose to 50.7 from 49.5 in November.
"The index shows manufacturing firming up a little bit at the end of the year, suggesting manufacturing conditions are stabilizing," said Gary Thayer, chief macro strategist at Wells Fargo Advisors in St. Louis, Missouri. In much of Europe though, the mood was downbeat.
Purchasing managers' surveys in the 17-nation euro zone showed economic decline spread further into the core members, suggesting the overall economy may have slipped deeper into recession at the end of 2012.
Markit's Eurozone Manufacturing Purchasing Managers' Index ( PMI) edged down to 46.1 in December from November's 46.2, below a flash reading of 46.3. It has been below the 50 mark that divides growth from contraction since August 2011. "It's pretty grim really," said Jonathan Loynes at Capital Economics.
"These surveys are pointing to a pretty deep recession. If the German industrial sector is contracting quite sharply it is pretty hard to see where growth across the euro zone as a whole is going to come from."
Germany, Europe's largest economy, saw its crucial manufacturing sector shrink for the 10th straight month and at a faster pace, while French data showed a decline in all but one of the past 17 months.
The slump in Spain deepened, while Italy's index, although improved, remained below 50 for the 17th month. Ireland was the only member of the currency union to show manufacturing growth in December.
Separate data on Wednesday showed French car sales dropped 15 percent in December, the worst annual performance in 15 years, while Spanish new car registrations were down 23 percent.
But British factory activity jumped unexpectedly to grow at its fastest pace since September 2011, raising the chance that its economy eked out some growth at the end of 2012.
"The sector seems to be showing some signs of improvement - probably as the euro zone (debt) crisis is easing a little bit and Chinese growth is bottoming out," said Rob Wood at Berenberg Bank.
In Asia as a whole manufacturing activity expanded, driven by revival in China's economy, but export demand was uneven, pointing to further sluggish growth for the region.
Factory activity in India expanded at its strongest pace in six months in December, boosted by output and a spike in new orders and similar reports showed an increase in South Korea and Taiwan for the first time since May.
indiatimes.com
US factory activity rebounded last month after an unexpected contraction in November, adding to signs of momentum in the world's largest economy as 2012 ended. The Institute for Supply Management's index of US factory activity rose to 50.7 from 49.5 in November.
"The index shows manufacturing firming up a little bit at the end of the year, suggesting manufacturing conditions are stabilizing," said Gary Thayer, chief macro strategist at Wells Fargo Advisors in St. Louis, Missouri. In much of Europe though, the mood was downbeat.
Purchasing managers' surveys in the 17-nation euro zone showed economic decline spread further into the core members, suggesting the overall economy may have slipped deeper into recession at the end of 2012.
Markit's Eurozone Manufacturing Purchasing Managers' Index ( PMI) edged down to 46.1 in December from November's 46.2, below a flash reading of 46.3. It has been below the 50 mark that divides growth from contraction since August 2011. "It's pretty grim really," said Jonathan Loynes at Capital Economics.
"These surveys are pointing to a pretty deep recession. If the German industrial sector is contracting quite sharply it is pretty hard to see where growth across the euro zone as a whole is going to come from."
Germany, Europe's largest economy, saw its crucial manufacturing sector shrink for the 10th straight month and at a faster pace, while French data showed a decline in all but one of the past 17 months.
The slump in Spain deepened, while Italy's index, although improved, remained below 50 for the 17th month. Ireland was the only member of the currency union to show manufacturing growth in December.
Separate data on Wednesday showed French car sales dropped 15 percent in December, the worst annual performance in 15 years, while Spanish new car registrations were down 23 percent.
But British factory activity jumped unexpectedly to grow at its fastest pace since September 2011, raising the chance that its economy eked out some growth at the end of 2012.
"The sector seems to be showing some signs of improvement - probably as the euro zone (debt) crisis is easing a little bit and Chinese growth is bottoming out," said Rob Wood at Berenberg Bank.
In Asia as a whole manufacturing activity expanded, driven by revival in China's economy, but export demand was uneven, pointing to further sluggish growth for the region.
Factory activity in India expanded at its strongest pace in six months in December, boosted by output and a spike in new orders and similar reports showed an increase in South Korea and Taiwan for the first time since May.
indiatimes.com
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