Business Express is an online portal that covers the latest developments in the world of business and finance. From startups and entrepreneurship to mergers and acquisitions, Business Express provides reporting on the stories that matter most to business leaders and decision-makers.The website publishes news, press releases, opinion and advertorials on various financial organizations, products and services which are commissioned from various Companies, Organizations, PR agencies, Bloggers etc. These commissioned articles are commercial in nature. This is not to be considered as financial advice and should be considered only for information purposes. It does not reflect the views or opinion of our website and is not to be considered an endorsement or a recommendation. We cannot guarantee the accuracy or applicability of any information provided with respect to your individual or personal circumstances. Please seek Professional advice from a qualified professional before making any financial decisions. We link to various third-party websites, affiliate sales networks, and to our advertising partners websites. When you view or click on certain links available on our articles, our partners may compensate us for displaying the content to you or make a purchase or fill a form. This will not incur any additional charges to you. To make things simpler for you to identity or distinguish advertised or sponsored articles or links, you may consider all articles or links hosted on our site as a commercial article placement. We will not be responsible for any loss you may suffer as a result of any omission or inaccuracy on the website.

Factories deliver mixed performance globally in January

Factories deliver mixed performance globally in January

By Lucia Mutikani and Jonathan Cable

WASHINGTON/LONDON (Reuters) -Global factories delivered a largely patchy performance at the start of 2024, surveys showed on Thursday, as new orders spurred momentum in the United States, but soft Chinese demand left Asia’s economies on a shaky footing and disruption to Red Sea shipping delayed deliveries in Europe.

In the United States, factories are on the cusp of recovery. The Institute for Supply Management’s Purchasing Managers’ Index (PMI) increased to 49.1 last month from a slightly downwardly revised 47.1 in December.

While it was the 15th straight month that the PMI remained below 50, which indicates contraction in manufacturing, its forward-looking new orders sub-index rebounded to 52.5 from 47.0 in December.

With orders picking up, goods inflation is stirring after months of deflation. The survey’s measure of prices paid by manufacturers increased to 52.9 from 45.2 in December.

The U.S. Federal Reserve left interest rates unchanged on Wednesday, but hailed a strong economy in which inflation continued to decline despite solid growth and low unemployment.

“The downturn in the (manufacturing) sector is fading and appears to justify the Fed’s view that it can wait a little longer before cutting interest rates,” said Andrew Hunter, deputy chief U.S. economist at Capital Economics.


Elsewhere, the prolonged downturn in euro zone manufacturing activity eased for a third consecutive month but could stretch through this quarter as a majority of sub-indices in the region’s PMI remained within the contraction zone.

HCOB’s final euro zone manufacturing PMI, compiled by S&P Global, climbed to 46.6 in January from December’s 44.4, matching a preliminary estimate, but still firmly below the 50 mark separating growth in activity from contraction.

Almost all sub-indices moved in a positive direction while those covering pricing showed inflationary pressures may have weakened last month.

Inflation in the euro zone eased as expected last month, but underlying price pressures fell less than forecast, official preliminary data showed on Thursday.

The downturn in Germany’s manufacturing industry, which accounts for about a fifth of Europe’s largest economy, eased in January and it was a similar picture in France.

Italy’s manufacturing sector contracted in January for a tenth straight month but at a significantly slower pace than at the end of last year while in Spain the pace of contraction also slowed markedly.

In Britain, which left the European Union four years ago, factories recorded an 18th consecutive month of contraction, albeit shallower than in December.

Don't miss out on any breaking news or insightful opinions!
Subscribe to our free newsletter and stay updated on the go!

By submitting this form, you are consenting to receive marketing emails from: Global Banking & Finance Review. You can revoke your consent to receive emails at any time by using the SafeUnsubscribe® link, found at the bottom of every email.

“While the UK and the euro zone have turned the corner and see an accelerated recovery starting 2024, today’s sub-50 PMI still indicates contraction and concerns remain,” said Boudewijn Driedonks at consultancy  McKinsey &  Company.

“The ongoing Red Sea crisis and supply chain disruption is a case in point – just as inflation is beginning to cool off.”

In the United States, the speed of deliveries cooled. That could in part also be reflecting the attacks on cargo vessels in the Red Sea by Yemen-based Houthi, which have forced shipping companies to avoid the route through the Suez Canal.


China’s private-sector Caixin/S&P Global manufacturing PMI stayed at 50.8 in January, unchanged from December.

The reading contrasted with an official survey that showed manufacturing activity contracted for the fourth straight month. Deflationary pressures were a lingering blight in the world’s second-largest economy, suggesting underlying weakness in demand.

Taken together, they point to a still-underperforming economy and back market expectations for more policy support measures this year.

The picture was patchy for Asian economies, with some bearing the brunt of soft Chinese demand better than others.

South Korea’s factory activity expanded in January for the first time in 19 months on improved orders for goods in key markets such as the United States and China.

But activity shrank in Taiwan and Malaysia, and expanded at a slower pace in the Philippines, the surveys showed.

“But both external and domestic demand appears weak in China,” said Toru Nishihama, chief emerging market economist at Dai-ichi Life Research Institute. “That means the global economy lacks a key driver of growth, which bodes ill for Asian economies.”

Manufacturing activity in Japan also shrank for an eighth straight month in January as output and new orders slumped, with some analysts warning of the hit from the production suspension at Daihatsu, a unit of auto giant Toyota Motor Corp.

India, by contrast, saw manufacturing improve substantially in January, with factory activity expanding at its fastest pace in four months on robust demand.

(Reporting by Lucia Mutikani, Jonathan Cable and Leika Kihara; Writing by Lindsay Dunsmuir; Editing by Shri Navaratnam, Christina Fincher and Paul Simao)

Recent Post: