Worldwide slide in output spares China factories
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Manufacturing in the world's largest economy grew in July at its slowest pace in nearly three years as a debt crisis in Europe and economic and political uncertainty at home dented demand. The final Markit US Manufacturing Purchasing Managers Index stood at 51.4 in July, below both a preliminary estimate of 51.8 and June's reading of 52.5. It was the lowest reading since September of 2009. A reading above 50 indicates expansion.
"If falling export orders and weaker domestic demand persist, the sector may start to contract in the third quarter," said Markit chief economist Chris Williamson.
Producers are being hit by the ongoing euro zone crisis, slower global economic growth and increasing unease about demand in the home market as elections loom closer and uncertainty hangs over fiscal and monetary policies, Williamson said.
Orders for export fell for a second straight month while the pace of overall new orders slowed to 51.0 from 53.7 in June.
In the euro zone, manufacturing took another turn for the worse last month as output plummeted, hammering home the scale of the region's economic crisis which also depressed export orders from factories in China and India.
Surveys of thousands of factories across the world released on Wednesday showed activity in the 17-nation euro zone contracted for the eleventh straight month in July as a downturn that began in the periphery sinks deeper roots into the core.
The manufacturing slump worsened in Italy, Spain and Greece, but also in the region's two biggest economies France and Germany, the purchasing managers indexes (PMIs) showed. Britain's PMI plummeted to a more than three-year low.
In Asia's biggest economies China and India, which until recently had appeared more resilient to the effects of recession in Europe and disappointing growth in the United States, export orders were weak and output stalled.
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