Tuesday, August 02, 2011

Global factory doldrums

SHOOT: You can play games with balance sheets, but in the end, reality speaks quite clearly, doesn't it.  The global economy cannot tolerate oil at any price, and just shy of $120, oil is putting growth of any and every kind on the skids.  Get used to it:

London - The world’s manufacturing sector expanded at its weakest pace since July 2009 last month as factories reported shrinking orders for the first time in more than two years, a survey showed on Monday.

The Global Manufacturing PMI (Purchasing Managers' Index), produced by JPMorgan with research and supply management organisation, slumped to 50.6 in July from August’s 52.3, its lowest level since July 2009, and barely above the 50 mark dividing growth from contraction.
Earlier data showed factories in Asia and Europe expanded in July at the weakest rate since major industrial powers were struggling through the 2009 recession, adding to concerns over world growth.

“Growth of the global manufacturing sector drifted closer to stagnation in July. Hopes of a near-term acceleration may have also been knocked by a slight retreat into contraction territory by the new orders index,” said Joseph Lupton, global economist at JPMorgan.

The July new orders index slipped to 49.9 from 51.0 in June. The pace of growth in the United States manufacturing sector slowed more than expected in July, the Institute for Supply Management (ISM) said earlier on Monday as its index of national factory activity fell to 50.9 from 55.3 the month before.

A Reuters poll taken last month predicted global growth this year of 4.1%, rising to 4.3%  in 2012. The Global Manufacturing PMI index combines survey data from countries including the United States, Japan, Germany, France, Britain, China and Russia.

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