Manufacturing expansion accelerates

The US recovery in manufacturing continued in December. Bloomberg reports:

U.S. manufacturing expanded in December at the fastest pace in more than three years, capping a late-2009 global factory rebound that helped pull the world out of the worst slump since the 1930s.

The Institute for Supply Management’s factory index rose to 55.9, the highest level since April 2006, according to the Tempe, Arizona-based group. Readings greater than 50 signal expansion...

There was, however, still no recovery in construction.

The economic recovery may get little relief from construction. Spending on construction projects dropped 0.6 percent in November, to the lowest level in more than six years, the Commerce Department said today in Washington.

At least the recovery in manufacturing is global. Again from Bloomberg:

Europe’s manufacturing industry expanded at the fastest pace in 21 months in December after a pickup in global trade helped the euro region emerge from the worst recession in at least six decades.

An index of manufacturing, based on a survey of purchasing managers in the 16-nation euro area, rose to 51.6 from 51.2 in November, London-based Markit Economics said today. That was in line with an initial estimate released on Dec. 16 and was the highest since March 2008. A reading above 50 indicates expansion.

And in the UK, it was not just manufacturing that provided positive data. From Reuters:

A sharp rise in manufacturing activity, mortgage approvals and a key measure of money supply boosted hopes on Monday that the economy is gaining traction after an 18-month recession...

British manufacturing activity expanded at its fastest pace in more than two years in December, according to the CIPS/Markit purchasing managers' index which rose to 54.1 last month, after a surprise fall to 51.8 in November...

The recovery in Britain's housing market ... continued to maintain momentum.

Approvals for mortgages for house purchase, a lead indicator of demand, rose by almost 3,000 in November to 60,518. This was the highest level since March 2008, and more than double the record low hit in November 2008...

Net mortgage lending rose by a surprisingly large 1.459 billion pounds in November, its highest since February. And while consumers repaid unsecured debt for a fifth consecutive month, the 376 million pound repayment was well below the 591 million pounds repaid in October.

There was also a marked rise in the Bank's preferred money supply measure, which attempts to strip out distortions from the financial sector and measure flows through the real economy.

The gauge, M4 excluding intermediate other financial corporations, rose by 0.9 percent in November, its fastest monthly pace since April. The three-month annualised rate picked up to -2.2 percent from October's -5.2 percent.

However, for manufacturing alone, few countries could beat the growth rate exhibited in China. From AFP/CNA:

Manufacturing in China continued to expand in December as new orders received by factories rose for the ninth month in a row on booming demand from home and abroad, a survey showed Monday.

The HSBC China Manufacturing PMI, or purchasing managers' index, rose to 56.1 in December from 55.7 in November, the survey showed...

A separate official PMI published by the China Federation of Logistics and Purchasing showed manufacturing activity rose to 56.6 per cent in December -- the highest reading in 20 months.

Even deflation-prone Japan is maintaining its manufacturing recovery. Last week, Japan reported that its manufacturing PMI rose to 53.8 in December from 52.3 in November.