Manufacturing in the euro area slowed in June. Bloomberg reports:
European manufacturing expanded at the weakest pace in almost two years in June, adding to signs that the region’s economy is losing some momentum.
A manufacturing gauge based on a survey of purchasing managers in the 17-nation euro region fell to 52 from 54.6 in May, London-based Markit Economics said today. That’s the lowest in 18 months. A reading above 50 indicates growth.
Manufacturing also slowed in the UK. Reuters reports:
Britain's manufacturing sector expanded at its slowest pace in almost two years last month, a survey showed on Friday, as factories reduced hiring and new orders fell, reinforcing concerns about the health of the broader economic recovery.
The Markit/CIPS manufacturing PMI index sank to a 21-month low of 51.3 in June from May's downwardly revised 52.0, worse than the average forecast from economists that the index would hold steady at 52.1, the previously reported level for May.
It was the same story in Asia. AFP/CNA reports:
China's manufacturing activity fell to an 11-month low of 50.1 in June from 51.6 in May, the British banking giant said in a statement, confirming preliminary data released last week, as Beijing tries to tame soaring costs.
The country's official purchasing managers index also fell for the third straight month to 50.9 in June from 52.0 in May, the China Federation of Logistics and Purchasing said earlier Friday...
India's PMI fell to 55.3 in June from May's 57.5 marking its slowest pace so far this year while input costs rose.
However, US manufacturing proved an exception to the pattern in the rest of the world. Bloomberg reports:
U.S. manufacturing unexpectedly accelerated in June, supporting the Federal Reserve’s forecast that the economy will strengthen in the second half of 2011.
The Institute for Supply Management’s factory index rose to 55.3, the first gain in four months, from 53.5 in May, the Tempe, Arizona-based group said today. Economists projected a decrease to 52, according to the median forecast in a Bloomberg News survey. Figures greater than 50 signal expansion.
Other US data on Friday were not as positive though.
Confidence among U.S. consumers declined in June. The Thomson Reuters/University of Michigan said today its final index of sentiment fell to 71.5 from 74.3 in May.
The Commerce Department reported that construction spending in May dropped for a sixth straight month. The 0.6 percent decrease matched the previous month’s decline, which was initially reported as a gain.
However, Japan, which to a large extent drove the current slowdown in the rest of the world, could be seeing a recovery ahead. From AFP/CNA:
Japanese business confidence plunged in the months after the March 11 earthquake, turning negative for the first time in over a year, the Bank of Japan said in its quarterly Tankan survey on Friday.
But firms expect conditions to improve by September and analysts said plans to increase capital spending signalled recovery hopes even amid uncertainty due to looming power shortages following the crisis at the tsunami-ravaged Fukushima Daiichi nuclear plant.
Large manufacturer sentiment in June dropped to "minus 9" from "6" in March, a plunge of 15 points and the first negative reading in five quarters...
The survey showed that big companies expected sentiment to improve to plus two in the next survey in September, and boost capital spending by 4.2 per cent in the current fiscal year.
Other Japanese data on Friday also indicate an improving economy. Again from AFP/CNA:
Japan's core consumer prices rose by a higher than expected 0.6 percent in May from a year earlier, boosted by increased energy prices, government data showed on Friday...
In separate data, Japan's unemployment rate fell to 4.5 percent in May from 4.7 percent in the previous month, with figures from disaster-hit northeastern Japan excluded, the government said.
The internal affairs ministry said that household spending in May fell by an inflation-adjusted 1.9 percent from a year earlier, a smaller drop than April's 3.0 percent fall and an 8.5 percent dive in March.