GLOBAL ECONOMY-Global factories enjoy bumper February

* Euro zone manufacturing expands; Spain, Greece lag

* Growth in China’s factory output slows a touch

* India and S.Korea PMI rises further in February

* U.S. PMI forecast to have dipped to 57.5 in Feb

By Jonathan Cable and Langi Chiang

LONDON/BEIJING, March 1 (BestGrowthStock) – Factories around the
world enjoyed a bumper February with business surveys showing
the manufacturing sector in major economies continued to lead an
economic recovery, despite a slowdown in some growth rates.

Factory activity expanded across Asia last month, although
powerhouse China showed some signs of weakening, while in Europe
growth rates hit 30-month highs despite contraction in laggards
Spain and Greece.

Data due later on Monday from the United States (1500 GMT)
is expected to show the index there dipped to a still robust
57.5 from January’s 58.4.

“There is a sense that the Asian upswing may have run into
the sand slightly but it was coming from a very strong base so
it was anticipated we would see some slowdown. European numbers
continue to show more dynamism,” said Peter Dixon, economist at

Markit’s Purchasing Managers’ Index for the euro zone jumped
to 54.2 in February from 52.4 the month before, slightly higher
than previously thought, but the Spanish and Greek indexes
remained below the 50.0 divide mark between growth and
contraction. [EUR/PMIM]

(For a graphic see:

It was something of a mixed bag in Asia where factory
activity in its main economies expanded, with India and South
Korea growing at their fastest pace in around two years but a
pair of surveys showed the pace of manufacturing growth in
China, the world’s third biggest economy, eased slightly.

(For a graphic on China, India South Korea PMI see

“Policymakers are driving with low visibility on the Chinese
activity data at the moment,” said Brian Jackson, a strategist
with Royal Bank of Canada, adding that the timing of the Chinese
New Year holidays complicated interpretation of data.

“So it would be premature to conclude that today’s fall in
the headline PMI numbers show a broader easing in the momentum
of China’s recovery.”

The UK saw growth levels matching January’s 15-year high of

Swedish data surprised markets earlier on Monday with news
that its economy unexpectedly slid back into recession in the
fourth quarter of 2009.


The euro (EUR=: ) was little moved after the European data but
the Australian dollar (AUD=: ) dipped and copper prices (SCFc3: )
pared their gains after Asia’s releases, which markets took as a
sign Chinese demand for metals and commodities might soften.

Exports in the euro zone grew at their fastest rate in three
years last month, boosted by the euro being battered near
nine-month lows due to worries over heavily indebted smaller
euro zone countries such as Greece and Portugal.

“The strength in the manufacturing sector reflects a surge
in exports,” said Nick Kounis at Fortis Bank.

Price pressures were also building in Asia and Europe with
input prices at 17-month highs in the euro zone but a negative
reading for output prices shows firms are still having to
discount goods to boost sales.

The PMI derived from a survey conducted by the China
Federation of Logistics and Purchasing for the National Bureau
of Statistics (NBS) fell to 52.0 in February, well below the
median forecast of 55.45 in a Reuters poll and down from 55.8 in
January. [ID:nBJB003693]

A separate survey conducted by research firm Markit for HSBC
showed the PMI dipping to 55.8 from a record high of 57.4 in
January. [ID:nTKC005738]

(For a graphic see

India’s PMI rose to 58.5 in February, its strongest reading
since June 2008, from 57.7 in January, boosted by expanding
output and new orders. [ID:nSGN002335]


“The headline index is consistent with ongoing double-digit
gains in industrial production which in turn is likely to mean
that spare capacity is being eaten into rapidly,” said Robert
Prior-Wandesforde, Senior Asian Economist at HSBC.

South Korea saw its headline PMI rise to the highest level
since December 2007 at 58.2. [ID:nSEV002971]

Stock Report

(Additional reporting by Anurag Joshi in MUMBAI, Yoo Choonsik
in SEOUL; editing by Stephen Nisbet)

GLOBAL ECONOMY-Global factories enjoy bumper February