* Global manufacturing growth stumbled in April
* PMIs add to string of weak data
* Data likely added to expectations for ECB rate cut
By Jonathan Cable and Langi Chiang
LONDON/BEIJING, May 2 Manufacturing across the
world stumbled last month, underlining the fragility of the
global economy and building the case for more action from
leading central banks.
Gloomy purchasing managers indexes - surveys of factory
activity that correlate strongly with economic activity - added
to a string of other economic data that has already soured
optimism that a budding pickup in the world economy will flower.
Over the past two days, manufacturing indexes for the United
States, euro zone - including powerhouse Germany - and China
have all declined. Britain's improved but was still signalling
"There is not a great amount of positive news out there.
Globally, we do see a weaker second quarter - there are no
arguments about that," said Victoria Clarke, economist at
A survey on Wednesday pointed to a slowdown in the United
States, which was soon followed by a signal from the Federal
Reserve signal that it would step up its asset purchase
programme if necessary.
Until recently, analysts had expected the Fed to buy a total
of $1 trillion in securities during its ongoing third round of
quantitative easing with expectations it would start to take its
foot off the accelerator in the second half of this year.
In the euro zone, manufacturing output declined again in
April as factory activity in Germany, Europe's largest economy
and the world's second-biggest exporter after China, fell for
the second month and at a faster pace than in March.
Manufacturers in France, Italy and Spain - the euro zone's
next biggest economies after Germany - all reported contraction
Combined, they pushed Markit's Eurozone Manufacturing
Purchasing Managers' Index (PMI), based on a survey of thousands
of companies across the 17-nation bloc, down to 46.7 last month
from March's 46.8. That marked a four-month low but came in
ahead of an earlier flash reading of 46.5.
Anything under 50 is seen as a contraction.
Signs of rot spreading in the euro zone will bolster already
solid expectations for an interest rate cut from the European
Central Bank to a new record low of 0.5 percent later on
Wednesday's U.S. data from the Institute for Supply
Management showed its PMI falling in April to 50.7 from 51.3
with a noticeable pull back in employment growth.
China's growth engine stuttered last month as well. The
official PMI fell in April to 50.6 from 50.9 in March, while a
comparable HSBC PMI, also reported on Thursday, dropped to 50.4
from 51.6 as new export orders fell.
"The tepid growth momentum is carrying over into the current
quarter, thus adding risks to expectations that China's annual
economic expansion will pick up to around 8 percent in spring,"
said Nikolaus Keis, economist at UniCredit.
A Reuters poll suggested growth would pick up in the second
quarter to 8.0 percent after 7.7 percent in the first quarter,
but analysts said forecasts were now at risk of a downgrade.
But Japan's PMI, released earlier this week, was the highest
in just over a year at 51.1, the latest evidence that Prime
Minister Shinzo Abe's aggressive economic policies are
benefiting the economy.
South Korea's overall PMI also rose in April, as domestic
new orders more than offset the impact of the cooling in