WEAK GLOBAL FACTORY DATA

Weak factory data grips globe

Wednesday, September 02, 2015

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China's giant manufacturing sector contracted the most in six years in August, while a private survey found that growth in US manufacturing slowed last month to the lowest pace in more than two years, reinforcing expectations that policymakers will need to ease policy further.Manufacturers across Asia struggled last month, a series of surveys showed, denting hopes of a pick-up in the second half of the year as the region tries to fire its traditional growth engine of exports.
Euro zone manufacturing growth also eased last month, despite factories barely raising prices, adding to the European Central Bank's woes as it battles to spur expansion and inflation.
The Chinese government's measure of manufacturing showed activity contracted at the fastest pace in three years, while a survey by Markit, which focuses more on smaller, private firms, showed the factory sector's weakest performance in 6 years.
Even China's services sector, which has been one of the few bright spots in the sputtering economy, showed alarming signs of cooling, expanding at its slowest rate in more than a year, Markit said. "Today's reading suggests that manufacturing activities in China remain weak. We now expect GDP to grow by an annual 6.4 percent in the third quarter," ANZ said, saying further policy support would help growth rebound to 6.8 percent in the fourth quarter.
In the United States, the Institute for Supply Management, a trade group for purchasing managers, reported that its manufacturing index slid to 51.1 last month from 52.7 in July.
It was the second straight drop and marked the weakest reading since May 2013. Anything above 50 signals growth. AGENCIES