Strong manufacturing data in the US and China have eased fears of a slowdown in global growth and suggest that a feeble European economy may diverge from robust activity elsewhere.
The US purchasing managers index recorded a surprise increase from 53.4 in March to 54.8 in April, the strongest since June 2011, assuaging fears of a “spring slowdown” in the world’s largest economy. Numbers above 50 indicate expansion. Meanwhile, the official Chinese manufacturing PMI rose to 53.3 last month, its highest in more than a year, from 53.1 in March. It was also China’s fifth consecutive month above the 50 level.
In China, the steadily higher PMI readings support the view that the fall in Chinese economic growth probably bottomed in the first quarter, when gross domestic product climbed 8.1 per cent year on year. Although Beijing is targeting 7.5 per cent growth this year, it is expected to exceed that.