Global manufacturing returning to growth

The outlook for the US economy continues to brighten, with manufacturing activity poised to grow again. Bloomberg reports:

Manufacturing in the U.S. shrank less than forecast as stimulus-induced gains in demand worldwide helped resuscitate factories from the worst slump in three decades.

The Institute for Supply Management’s factory gauge rose to an 11-month high of 48.9 in July, according to the Tempe, Arizona, group. Readings below 50 signal contraction. A report from the Commerce Department showed June building projects climbed 0.3 percent, helped by higher public spending.

The eurozone manufacturing PMI also hit an 11-month high. From Bloomberg:

The European manufacturing industry’s contraction slowed more than initially estimated in July, adding to indications the worst recession in six decades may have bottomed out.

An index of euro-area manufacturing activity rose for a fifth month, increasing to 46.3 from 42.6 in June, Markit Economics said today. The July figure is the highest in 11 months and exceeds the initial estimate of 46 on July 24. The index is based on a survey of purchasing managers by London- based Markit and a reading below 50 indicates a contraction.

Even better, manufacturing has already returned to growth in several major economies.

Reuters reports the latest number from the UK.

Manufacturing activity grew last month for the first time since March 2008, benefiting unexpectedly from the fastest flow of new orders since November 2007, purchasing managers' data showed on Monday.

The headline manufacturing purchasing managers' index rose to 50.8 from an upwardly revised 47.4 in June, the first time the number from the Chartered Institute of Purchasing and Supply and Markit Economics has been above the 50 level that divides contraction from growth since March last year.

Last week, Japan had also reported a return to growth in manufacturing, the Nomura/JMMA Japan manufacturing PMI rising to 50.4 in July from 48.2 in June.

Meanwhile, manufacturing in China has already been growing for a few months. AFP/CNA reports the latest numbers.

The CLSA China Purchasing Managers Index, or PMI, a closely watched indicator in the world's third-largest economy, rose to 52.8 last month, the highest since July 2008, when it stood at 53.3...

Figures published by the China Federation of Logistics and Purchasing on Saturday showed the sector expanded in July for the fifth consecutive month to 53.3, up from 53.2 in June.

The improving national PMIs helped push the global PMI to 50.0 in July, its highest level in 14 months, from 47.0 in June.