Friday 3 January 2014

Manufacturing grows, stocks fall

Reports on Thursday were positive for the global economy, with manufacturing in particular showing continued growth at the end of 2013.

In the US, Markit's manufacturing PMI rose to 55.0 in December from 54.7 in November. The Institute for Supply Management’s manufacturing PMI fell to 57.0 in December from 57.3 in November but the latter had been the highest since April 2011.

Other reports from the US on Thursday showed that construction spending rose 1.0 percent in November to the highest level since March 2009 and initial claims for unemployment benefits fell by 2,000 last week to 339,000, the lowest level in a month.

Data on Thursday showed that manufacturing in the euro area also grew in December. Markit's manufacturing PMI for the region rose to 52.7 last month, its best reading in 31 months, from 51.6 in November.

UK manufacturing slowed in December though. The Markit/CIPS manufacturing PMI fell to 57.3 last month after hitting a three-year high of 58.1 in November.

Manufacturing also slowed in China in December. A report on Thursday showed that HSBC's manufacturing PMI fell to 50.5 last month from 50.8 in November. This followed a report on Wednesday from the National Bureau of Statistics showing that the official PMI fell to 51.0 last month from 51.4 in November.

The signs of continued economic growth for the end of last year did not help markets start the new year positively, however. The S&P 500 fell 0.9 percent on Thursday while the STOXX Europe 600 Index lost 0.7 percent.

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