Manufacturing activity accelerated in most countries around the world in February.
Bloomberg reports that manufacturing in the US grew at the fastest pace in almost seven years in February.
The Institute for Supply Management’s factory index increased to 61.4, exceeding the median forecast of economists surveyed by Bloomberg News and the highest level since May 2004, the Tempe, Arizona-based group said...
The ISM’s order gauge climbed to the highest level since January 2004 and its employment measure reached a 38-year high, today’s report showed. Exports accelerated at the fastest pace since December 1988, and the gauge of prices paid increased to a seven-year high.
In contrast, construction activity has remained weak.
Another report today showed construction spending fell more than forecast in January, paced by the biggest slump in commercial projects in 17 years.
The 0.7 percent drop brought the value of all projects down to a $791.8 billion annual rate, the lowest since August, Commerce Department figures showed. Outlays on private non- residential works dropped 6.9 percent, the most since January 1994, which may in part reflect the influence of winter storms.
Meanwhile, manufacturing growth in the euro area accelerated to the fastest pace in more than 10 years in February. Bloomberg reports:
A gauge of manufacturing in the euro region rose to 59 last month from 57.3 in January, London-based Markit Economics said in an e-mailed report today, confirming a Feb. 21 estimate. That’s the highest since June 2000. A reading above 50 indicates expansion.
Other reports on Tuesday showed the widening effects of eurozone recovery. From Bloomberg:
Inflation in the 17-nation euro region quickened to 2.4 percent from 2.3 percent in January, the European Union’s statistics office in Luxembourg said today in a preliminary estimate. That’s the fastest since October 2008 and the third straight month inflation has exceeded the ECB’s 2 percent limit. Economists expected a reading of 2.4 percent, according to the median of 31 estimates in a Bloomberg News survey...
Euro-area unemployment fell to 9.9 percent in January from 10 percent in December, the statistics office said in a separate report today.
The European Commission today raised its growth and inflation estimates for 2011. It expects the economy to expand 1.6 percent this year, up from 1.5 percent previously, and said higher oil and commodity prices will see inflation average 2.2 percent. That’s up from a November projection of 1.8 percent.
Reports from the UK were also positive, with the manufacturing PMI holding at a record high of 61.5 in February, house prices rising in February and mortgage approvals picking up as mortgage lending rose to its highest level in almost a year in January.
China's economy, though, could be slowing. From AFP/CNA:
Manufacturing activity in China fell to a seven-month low in February as overseas orders weakened, but rising cost pressure added to inflationary concerns, an independent survey showed Tuesday.
The HSBC China Manufacturing PMI, or purchasing managers index, fell to 51.7 in February from 54.5 in January, the British banking giant said in a statement.
A government survey also showed factory production fell to a six-month low of 52.2 in February from 52.9 in January, the China Federation of Logistics and Purchasing (CFLP) said in a statement.
Inflation indicators are still rising though.
However, input costs accelerated to a three-month high, HSBC said, with purchasing managers blaming rising raw material and fuel prices, which factories passed on to customers - fanning inflation in the broader economy...
The CFLP said its input price subindex rose to 70.1 per cent in February from 69.3 per cent in the previous month, which curbed production in some industries.