Manufacturing accelerates in US and Europe

Bloomberg reports that in January, manufacturing in the US grew by the most since 2004.

Manufacturing in the U.S. unexpectedly accelerated in January at the fastest pace in more than six years, reinforcing forecasts the economic recovery will strengthen in 2011.

The Institute for Supply Management’s factory index rose to 60.8, exceeding the most optimistic forecast in a Bloomberg News survey of economists and the highest level since May 2004, figures from the Tempe, Arizona-based group showed today. Readings greater than 50 signal growth...

Figures from the Commerce Department showed housing remains the economy’s weakest link. Construction spending in December fell 2.5 percent, the biggest drop since July, bringing the value of all projects to the lowest level in a decade.

Another Bloomberg report showed that manufacturing also accelerated in the euro area.

European manufacturing growth was stronger than initially estimated in January, accelerating to the fastest pace in nine months on stronger output in Germany.

A gauge of manufacturing in the euro region rose to 57.3 from 57.1 in December, London-based Markit Economics said in an e-mailed report today. That’s the highest since April and above the initially reported 56.9. A reading above 50 indicates growth. In Germany, output growth slowed less than initially estimated, with a gauge at 60.5, down from 60.7.

It was a similar story in the UK. Again from Bloomberg.

U.K. manufacturing grew at a record pace in January as domestic and export demand boosted orders, while price pressures intensified, a report today showed.

A gauge based on a survey of companies by Markit Economics and the Chartered Institute of Purchasing and Supply surged to 62 from a revised 58.7 in December, according to an e-mailed statement today in London. That’s the highest since the survey began in 1992. A measure above 50 indicates expansion.

The data were more ambiguous in China. AFP/CNA reports:

Manufacturing growth in China slowed in January, official figures released Tuesday showed, but rising input costs signalled Beijing has not yet tamed inflation.

The country's Purchasing Managers Index fell to 52.9 in January from 53.9 in December, the China Federation of Logistics and Purchasing, which issues the data with the National Bureau of Statistics, said in a statement...

However, an independent seasonally adjusted PMI reading released by HSBC bank indicated manufacturing activity stayed relatively stable in January at 54.5, up slightly from 54.4 in December.