World Business

Global manufacturing slows in May

(Agencies)
Updated: 2010-06-02 11:33

China's official purchasing managers' index released on Tuesday fell in May to a reading of 53.9 from 55.7 in April, just below market expectations but still the 15th straight month of growth.

A companion index compiled by British research firm Markit for HSBC dropped to an 11-month low of 52.7 in May from a downwardly revised 55.2 in April.

Because China has been an engine of global growth as the world emerges from its deepest recession in decades, a sharp slowdown in China could deal a blow.

"The result indicates weakening of momentum in the manufacturing sector and confirms our expectation that GDP growth will slow sharply in Q2 and continue decelerating in Q3," Dariusz Kowalczyk, SJS Markets chief investment strategist in Hong Kong, said.

In the euro zone, manufacturing activity expanded in May at a considerably more sluggish pace than April's 46-month high. Britain managed to buck the trend, with the index holding at April's 15-year high.

The Markit Eurozone Manufacturing Purchasing Managers' Index for May sank to 55.8 from 57.6 in April, down from an earlier flash estimate of 55.9. In Britain the index was unchanged from April at 58.0.

Related readings:  China's May manufacturing expands at slower pace  PMI in expansion mode during May  China's May PMI falls to 52.7  China, EU vow more co-op in information tech

The 16-nation euro zone has been hit by waves of insecurity churned up by the region's debt crisis and fears that troubles in Greece may spread to other peripheral economies.

Separate data from the euro zone showed unemployment, a lagging indicator, inched up in April to a near 12-year high of 10.1 percent.

Canada on Tuesday became the first among the Group of Seven richest countries to hike its key interest rate after the global recession, but said the European debt crisis made its next move highly unpredictable.

Data in other Asian countries was mixed. India's PMI surged to a 27-month high of 59.0 in May, the 14th month the indicator has shown expansion.

The move was mirrored in Japan where the manufacturing sector grew in May at its fastest pace in almost four years after a slowdown in April.