Tuesday, 3 May 2011

Manufacturing expands in US, accelerates in euro area

The economic reports on Monday were quite positive.

US data showed growth in manufacturing activity and construction spending. Bloomberg reports:

Manufacturing expanded faster than forecast in April, driven by gains in exports and inventories that are keeping the industry at the forefront of the U.S. economic expansion.

The Institute for Supply Management’s factory index fell to 60.4 last month from 61.2 in March, the Tempe, Arizona-based group said today. Readings greater than 50 signal expansion and the measure has exceeded 60 for four consecutive months, the best performance since 2004...

Another report showed construction spending rose more than forecast in March as companies put up factories and power plants, while home improvement outlays also rebounded. The 1.4 percent gain was the biggest since April 2010 and followed a revised 2.4 percent decrease in February that was larger than previously estimated, Commerce Department figures showed.

Also today, results from a Federal Reserve survey showed banks made borrowing easier in the first quarter as they forecast the economy will improve. Looser standards for business loans reflected more competition among banks, while some financial institutions “also pointed to a more favorable or less uncertain economic outlook,” the Fed said in its quarterly poll of senior loan officers.

In the euro area, manufacturing activity accelerated in April. Bloomberg reports:

European manufacturing growth accelerated more than estimated in April, driven by higher output in Germany and France, suggesting the region’s economy is weathering surging energy costs.

A gauge of manufacturing in the 17-nation euro area rose to 58 from 57.5 in March, London-based Markit Economics said in an e-mailed report today. That’s above an initial estimate of 57.7 on April 19. A reading above 50 indicates growth.

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