| NEW YORK/LONDON
NEW YORK/LONDON Major economies in North America, Europe and Asia lost some momentum this month, business surveys showed on Tuesday, a development that may see central banks intensify efforts to revive a flagging global recovery.
China and Germany, the world's biggest exporters, both lost a step in April. Growth in Chinese factories slowed to a crawl as export demand dwindled, while the euro zone's largest economy saw business activity decline for the first time in five months.
U.S. manufacturing grew at its most sluggish pace in six months as domestic demand dried up, suggesting the world's biggest economy started to lose ground in the second quarter.
Signs were more hopeful in the U.S. housing market, where March sales were the second highest in three years. But firms and households fear that across-the-board government spending cuts were likely to slow growth further in coming months.
The U.S. data "will obviously add significantly to concerns, most recently related to the softer China and German data, that another seasonal slowdown in the global economy is taking hold," said Alan Ruskin, Deutsche Bank's head of G10 currency strategy.
More than three years after the global recession, sluggish activity in rich and poor countries has confounded policymakers who have tried mightily to kick-start growth.
The International Monetary Fund this month trimmed its global growth forecast to 3.3 percent, leaving it on par with the 3.2 percent rate recorded in 2012.
Slower global growth and falling commodity prices are likely to quash inflation fears and speculation that the Federal Reserve will start tapering its $85 billion monthly asset purchases any time soon.
The Bank of Japan, hoping to end decades of stagnation, this month began an aggressive stimulus program that will pump $1.4 trillion into its economy in less than two years.
But policymakers are also scrambling for new ideas.
Finance officials from the world's biggest economies have started to edge away from a drive to revive growth through large cuts to bloated budget deficits, an unpopular policy that European Commission President Jose Manuel Barroso said had reached its limits.
Governments in many the euro zone's peripheral countries with high debt burdens and slow growth, have prescribed the bitter medicine of steep budget cuts and higher taxes to shore up public finances, but that has made it harder to grow and unemployment has risen.
April data showed even Germany, among the healthiest of Europe's economies, was feeling the pinch. Financial data firm Data vendor Markit said its preliminary services PMI for Germany, measuring growth in companies ranging from hotels to banks, fell to 49.2 in April from 50.9 the previous month.
The unexpected decline added a new dimension to next week's European Central Bank meeting, which some analysts expect will deliver an interest rate cut.
"With Germany unable to offset the austerity and credit crunch drag on growth in the (weaker euro zone states), and with excess capacity growing and business expectations falling, the only question is why the European Central Bank has not cut rates already," said Lena Komileva, director of G+ Economics.
Chris Williamson, chief economist at Markit, said the data may signal a renewed downturn for Germany in the second quarter.
The U.S. economy may be facing a similar loss of momentum. While the government is expected to report first-quarter gross domestic product growth of around 3.0 percent on Friday, the manufacturing slump in April suggests "the picture looks to have already began to darken again, with growth set to weaken in the second quarter," Williamson said
Williamson chalked up the decline in Markit's preliminary U.S. PMI to 52.0 from 54.6 partly to the impact of higher taxes and government belt-tightening.
The federal government began implementing across-the-board spending cuts last month, known formally as sequestration. It has meant everything from furloughs for air traffic controllers to fewer planes for the Navy to smaller subsidies for farmers.
For American companies, some sales were lost already, but the bigger concern is how much they might lose in months to come as the budget cuts begin to really take hold.
"Sequestration is a reality, but it's unfolding slowly at this time," United Technologies (UTX.N) Chief Executive Louis Chenevert said in an interview Tuesday. "We will understand more what sequestration does as we get to the end of the year."
Worries about sluggish global growth were illustrated by purchasing managers indexes from Asia.
The flash HSBC Purchasing Managers' Index for China in April fell to 50.5 in April from 51.6 in March but was still stronger than February's reading of 50.4.
The figures followed an unexpected contraction in export orders in March to Taiwan, one of the region's biggest providers of technology gadgets, signaling that Asia's trade-reliant economies may be losing further momentum.
"This release was more in line with the official PMI headlines in previous months, painting a picture of a painfully slow recovery in China's manufacturing sector," said Societe Generale economist Wei Yao in Hong Kong.
The official PMI is due on May 1.
There might be better times ahead for India, whose finance minister on Tuesday said the country's worst slowdown in a decade has bottomed out.
Despite the generally weak global economic data, major stock markets rose on Tuesday, with European shares posting their biggest one-day gain in seven months as investors bet slowing economic growth would force the ECB to cut interest rates soon.
(Additional reporting by Ben Berkowitz in New York; editing by Jeremy Gaunt and Clive McKeef)