China rebound speeds up as US growth stutters

Ben Southwood
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CHINA’S recovery from its manufacturing slowdown gathered pace in March, data showed yesterday, as separate figures suggested steam was coming out of US growth.

HSBC and Markit’s Chinese purchasing managers’ index (PMI) climbed from 50.4 in February to 51.6 in March, further above the crucial 50 level that signals no change in conditions.

“China’s recovery continues, mainly driven by the gradually improving domestic demand conditions,” said HSBC economist Hongbin Qu.

A separate PMI for the US, from the Institute for Supply Management (ISM), dived from 54.2 in February to 51.3, a slower pace for the fourth straight month of growth in the sector.

This was the 46th successive month of improvement in the overall economy, the ISM said, which it says is marked by a score above 42.2. The current rate implies GDP growth of 2.8 per cent annually. And despite the fall, new orders, production and employment were all still growing, ISM said.

A separate PMI from Markit gave a yet more optimistic picture of the manufacturing sector. Markit’s PMI inched up from 54.3 in February to 54.6 last month, indicating a slight pick up in the pace of growth.

Markit said its data suggested that the pace of expansion in output fell, but that employment growth sped up, and that new orders grew at a steady pace. Markit chief economist Chris Williamson said the employment sub-index was consistent with an extra 15,000 employees being hired over the month.

And construction figures, from the Census Bureau, added to the positive picture. Private construction was up 1.3 per cent between January and February, the numbers showed, while public construction climbed 0.9 per cent.

In total, the first two months of 2013 saw 6.6 per cent more construction spending than in the same two months of 2012 – $120.1bn (£78.9bn) versus $112.6bn.