GLOBAL ECONOMY-Global manufacturing slows in May

* U.S. new orders, exports hold up

* Factory growth slows in euro zone

* China, South Korea PMIs point to moderating growth

* India’s PMI expands at fastest rate in 27 months

By Edward Krudy and Jonathan Cable

NEW YORK/LONDON, June 1 (BestGrowthStock) – Manufacturing growth
slowed across the globe in May, but there was some relief in
the United States where there was scant evidence of an
impending slump, amid increasing uncertainty over the impact of
Europe’s debt crisis on the global economy.

U.S. manufacturing expanded in May for a 10th straight
month, though at a slightly slower pace than in April,
according to data released on Monday. New orders and exports
were stable, however, calming fears that Europe’s crisis has
started to drag on the U.S. economy.

“It was better-than-expected outcome but still a slower
pace than in April,” said Tom Porcelli, U.S. economist at RBC
Capital Markets in New York.

“We still remain at a remarkably high level and it’s still
consistent with an expansion in manufacturing which we still
expect will move along at a pretty decent clip.”

The Institute for Supply Management said its index of
national factory activity slipped to a reading of 59.7 in May
from 60.4 in April, but it was still the 10th month the index
was above 50, the level that signals expansion. The index’s
employment component rose to a six-year high.

Major U.S. stock indexes rose following the data, reversing
an earlier decline, also helped by government data showing that
U.S. construction spending had its biggest monthly increase in
almost 10 years.

For a graphic, see

http://link.reuters.com/gyw57k

PURCHASING MANAGERS IN THE LIMELIGHT

The May global Purchasing Managers’ Index surveys are being
closely watched by investors because they could shed light on
how the debt crisis in the euro zone is impacting the world
economy.

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. [ID:nTOE65001Z]

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.

The UK 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 the UK the index was
unchanged from April at 58.0. [EUR/PMIM] [GB/PMIM]

For a graphic see:

http://r.reuters.com/quj57k

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.

“There has been a slowdown in growth globally, and in the
euro zone there is subdued domestic demand due to the austerity
measures implemented in some countries,” said Luigi Speranza at
BNP Paribas.

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. [ID:nBRQ009874]

According to economists in a Reuters poll on Friday,
surging emerging economies will push global growth to a faster
rate this year than previously thought, but the momentum will
run out next year. [ID:nLDE64R1ST]

Canada on Tuesday became the first among the Group of Seven
richest countries to hike its key interest rate from emergency
low levels, but said the European debt crisis made its next
move highly unpredictable. [ID:nN01103957]

INDIA IGNITES

India’s PMI surged to a 27-month high of 59.0 from 57.2 in
April. It was the 14th month the indicator has been above 50.

India’s economy expanded 8.6 percent in the March quarter,
compared with a year earlier, the strongest pace in six months,
GDP figures on Monday showed.

Japan’s manufacturing sector grew in May at its fastest pace
in almost four years after a slowdown in April. The Nomura/JMMA
Japan Manufacturing Purchasing Managers Index rose to a
seasonally adjusted 54.7 from 53.8 the previous month.
[ID:nTKC005843]

Nomura economist Minoru Nogimori said high export orders
suggested Japan’s shipments will stay strong, particularly to
Asia.

“Although there are concerns over financial market
disruption triggered by government debt problems in Europe, we
expect the export-led manufacturing recovery to continue,”
Nogimori said.

South Korea’s May PMI hit a five-month low of 54.61
compared to 57.06 in April. The PMI coincided with official
data showing that exports in May jumped close to 42 percent
over a year earlier and the average exports per working day hit
a record $1.84 billion. [ID:nSUL000063] [ID:nTOE64U00S]

Many Asian countries are still showing double-digit gains
in exports from a year earlier despite the financial market
turmoil triggered by the debt crisis.

“But the key word here is ‘yet’ and there still must be
some caution about the near-term strength of external demand,”
said Brian Jackson, senior emerging market strategist at Royal
Bank of Canada in Hong Kong.
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Insider TV: HSBC Chief China economist on the economy

http://link.reuters.com/huz37k

Graphic on Asia PMIs:
http://graphics.thomsonreuters.com/10/AS_PMI0610.gif

Graphic on China’s PMIs:

http://graphics.thomsonreuters.com/10/CN_PMI0610.gif
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Investing Basics
(Additional reporting by Alan Wheatley in Beijing; Writing by
Jan Dahinten; Editing by Jason Webb and Leslie Adler)

GLOBAL ECONOMY-Global manufacturing slows in May