Global manufacturing shrinks for first time since 2009
By Pedro da Costa and Jonathan Cable
Mon Oct 3, 2011
(Reuters) – Global manufacturing shrank for the first time in over two years in September, reinforcing fears of another recession despite a modest bounce in U.S. factory activity.
Against the trend, manufacturing activity in the U.K. and the U.S. picked up speed, but slumps in factory output in Europe and Asia raised questions about the sustainability of the rebound, given a forward-looking measure of demand in the U.S. data still pointed to contraction.
World stocks kicked off the final quarter of the year lower on Monday, while the yen and government bonds rose, as the manufacturing data and concerns about a possible Greek debt default weighed on investor sentiment.
“A recession in the global economy could cause a China hard landing,” Barclays Capital economists wrote in a note to clients, adding that this was not their baseline forecast.
The Global Manufacturing PMI, compiled by JPMorgan with research and supply organizations, fell in September to 49.9 from 50.2 in August. It is the first time since June 2009 that the index has fallen below the 50 mark that divides growth from contraction.
EUROPE MANUFACTURING CONTRACTS FOR SECOND MONTH