NEW YORK (Reuters) – US manufacturing suffered its weakest quarter in three years and conditions at European businesses worsened, surveys showed on Thursday, while China’s economy continued to lose momentum.
The data shed more light on the difficult task facing global policymakers, particularly in Europe and the United States, who have tried to boost growth with aggressive monetary stimulus.
European stocks remained weaker and the euro depreciated against the dollar on Thursday as fresh data compounded concern about global growth, while yields on the debt of fiscally strained euro zone nations were stable after a Spanish government bond sale exceeded targets.
The US manufacturing sector closed out its worst three months since the third quarter of 2009 in September, according to financial information firm Markit.
Export orders fell for a fourth month running as demand from Europe and Asia faded, with September’s slide the steepest in nearly a year.
“Manufacturing isn’t looking good,” said David Sloan, economist at 4Cast Ltd in New York, adding that “the global situation is a restraint on the US economy.”.
Growth in Asia, and China in particular, is slowing down, so US growth is going to have to be domestically generated.
A separate report showed factory activity in the US mid Atlantic region shrank for the fifth month in a row in September, though the rate of contraction was not as severe as in prior months.
The fall in the PMI is another reminder that the ECB’s new asset purchase program is not an answer to all of the region’s problems,” said Ben May, European economist at Capital Economics, in a research note. “The euro zone recession looks set to deepen in the latter part of the year.
A preliminary euro zone purchasing managers’ index, or PMI, for the euro zone fell to its lowest level since June 2009.
“MORE STIMULUS EXPECTED IN CHINA, EUROPEExport driven Asian economies struggled also again in September.The China HSBC manufacturing PMI inched up in September to 47.8 from August’s nine month low of 47.6, suggesting the world’s second largest economy remains on track for a seventh quarter of slowing annual growth.”.
In order to convert hopes into reality and avoid an outright hard landing, the Chinese authorities have to step up again their accommodative efforts on both the fiscal and the monetary side,” said Nikolaus Keis, economist at UniCredit.China’s economic slowdown is expected to reach its nadir this quarter, with a recovery of momentum delayed until the final quarter, leaving growth for 2012 likely to fall below 8 percent, a level last seen in 1999, a Reuters poll showed last week. <ECILT/CN>European Union and Chinese leaders are meeting in Brussels on Thursday leaders to try to bridge growing differences over trade and find common ground on tackling Europe’s debt crisis.European manufacturers performed slightly better than economists had hoped this month, while the downturn in Germany, the euro zone’s largest economy, also eased a bit.”.
LONDONConstruction across the euro zone continued to decline in July, indicating the single currency area will likely struggle to post economic growth in the third quarter of this year, data showed Wednesday.
We’re not altogether hopeful about that,” said Markit chief economist Chris Williamson.However, trouble for French factories and service oriented businesses increased at a faster pace than expected.Altogether, the surveys bolstered expectations that the ECB will cut its main interest rate in October to a new record low.”.
Julia Macdonald is a business journalist based in Cairns, Australia. Julia has a passion for financial markets and breaking news stories and loves writing about business news, stock market, and economic opinions that matters most to its audience. Julia spends a lot of time discovering and researching latest financial markets and industry news stories in order to make sure the latest and greatest stories are brought to you first on BigBoardNews.com.