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Tuesday, June 25, 2013

Chinese, U.S. factories struggle, Europe still in slump

By Jonathan Cable and Steven C. Johnson

Reuters - Thu, Jun 20 2013

Factory output in China weakened to a nine-month low in June while U.S. manufacturing closed out its worst quarter in the last four, suggesting the road to recovery for the world economy remained an uneven one.

A day earlier, the Federal Reserve said the U.S. economy was expanding strongly enough for the central bank to begin slowing the pace of its stimulative bond purchases later this year.

Other major economies are lagging America's, however, which could limit the strength of global growth. China, the world's second largest economy, grew at its slowest pace in 13 years in 2012 and incoming data this year has been weaker than expected.

That's evident in the country's large manufacturing sector, which, according to the flash HSBC Purchasing Managers Index, contracted again in June as demand fell.

"A slowdown in the Chinese economy doesn't help the outlook for the U.S. particularly, but American growth isn't entirely dependent on what happens in China," said Philip Shaw, chief economist at Investec.

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