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PMIs: few bright spots in global economy

Wednesday, June 01, 2016 - 01:33

Euro zone factory orders remain tepid in May, while Japan manufacturing shrinks at its fastest pace in three years, as faltering growth continues to dog the world economy. David Pollard reports.

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It's damp in France - June shaping up to be one of the wettest in years. Its manufacturing apparently waterlogged too - activity shrinking for a third straight month, according to the latest PMI data. And with the euro zone reading also at a three-month low, the outlook at best, still cloudy. SOUNDBITE (English) IG SENIOR ANALYST, CHRIS BEAUCHAMP, SAYING: "Bright spots are hard to find in euro zone data at the moment and that's what this morning's PMI numbers show. If you look at the new orders coming through, there's nothing particularly cheery there. I'm not sure that you can find anything that is too positive." If there's a bright spot, it's Germany. Its PMI at a four-month high. But outside the euro zone, Chinese factory growth is tepid - Japan's contracting at its fastest in three years. An economy there still bogged. SOUNDBITE (English) IG SENIOR ANALYST, CHRIS BEAUCHAMP, SAYING: "It's doubtful whether Japan ever really left the mud, really. We continue to see stagnation across the economy. The weaknesses of the last few months is just the latest symptom of that." Global concerns even more food for thought for Mario Draghi's ECB policymakers as they meet this week. Though there could be few options on the table for further easing. SOUNDBITE (English) IG SENIOR ANALYST, CHRIS BEAUCHAMP, SAYING: "I'm not quite sure really how much further he can push his luck, at the moment. With the feeling on the committee running against further moves at least in the short term, I think he might it rather hard to pull a rabbit out of his hat." New forecasts just released by the OECD put global growth at 3.0 per cent this year, its lowest since the financial crisis. That coming with a call for major governments to boost spending - the one thing they failed to agree on at last week's G7 summit.

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PMIs: few bright spots in global economy

Wednesday, June 01, 2016 - 01:33