Global manufacturing surges back

Global manufacturing surges back
By James Politi in Washington, Stanley Pignal in Brussels and Justine Lau in Hong Kong
Copyright The Financial Times Limited 2010
Published: February 1 2010 20:16 | Last updated: February 2 2010 02:40
http://www.ft.com/cms/s/0/4436e98e-0f6d-11df-a450-00144feabdc0.html


Manufacturing activity soared around the world in January, according to surveys released on Monday that will bolster the hopes of a strong global recovery.

In the US, the Institute for Supply Management index – a key measure of industrial activity – rose from 54.9 to 58.4, its highest level since August 2004 and well ahead of economists’ expectations.

The key components of the index – production, employment and new orders – all increased, leading Norbert Ore, chair of the ISM survey, to declare that the report offered “significant assurance that the manufacturing sector is in recovery”.

The comforting US data followed strong evidence from Asia and Europe that manufacturers are beginning to ramp up production to meet stronger demand.

China reported record industrial activity for the month while the purchasing managers’ indices in India, South Korea and Taiwan also rose strongly.

India’s HSBC PMI rose from 55.6 in December to 57.7 in January, the strongest level since August 2008.

The eurozone’s manufacturing purchasing managers’ index rose to 52.4 last month, against 51.6 at the end of 2009.

It was the fourth month in succession that the 3,000-strong panel surveyed by Markit reported overall growth in the manufacturing sector.

Industrial growth was led by the region’s healthiest economies, especially France, where manufacturing expanded at the fastest pace in almost a decade.

Germany and Italy were also strong, as was the UK, where weaker sterling helped manufacturing activity increase to a 15-year high last month.

The latest ISM data in the US underscores the good news on the health of the economy.

On Friday, the government said output rose unexpectedly quickly in the fourth quarter – at an annualised rate of 5.7 per cent – on the back of higher business spending and much slower inventory reductions.