The ECRI has called for a recession in the US, but earlier they had called for a global slowdown. Today’s data releases suggest the slowdown continues apace. Europe’s manufacturing surveys turned negative with even the German juggernaut coming to a standstill. From Reuters:
Markit’s Eurozone Manufacturing Purchasing Managers Index (PMI) which gauges changes in the activity of thousands of factories in the countries that share the euro, fell to a final reading of 48.5 in September from 49.0 in August.
It is the second consecutive month the manufacturing PMI has been below the 50 mark that divides contraction from growth.
“In a nutshell, the recession in the euro zone periphery’s manufacturing activity is weighing on the overall euro zone index that — in September — suggests that the economy is not growing in Q3,” said Annalisa Piazza at Newedge.
Mounting evidence of a weakening euro area economy prompted some economists to predict the European Central Bank will cut interest rates on Thursday, although most expect it to wait until the new year before easing policy.
Factory activity in Spain, struggling under harsh austerity measures like much of the euro zone periphery, fell at the fastest pace in more than two years, surveys showed on Monday.
French manufacturers, meanwhile, saw activity decline for the second month in a row. Even in Germany, the biggest and arguably the most prosperous economy in the 17-nation bloc, manufacturing growth effectively came to a standstill.
But British manufacturing unexpectedly grew for the first time in three months, although a slide in new export orders highlighted the dangers facing the sluggish recovery.
China showed improvement, but hold on, it was actually terrible:
Even in China, which reported a slight uptick in its official PMI, economists saw evidence of a cool-down. China’s factory activity typically rises in September as businesses prepare for the Golden Week holiday, but this year’s increase was smaller than the average.
“There was no reason to be cheerful, as this was in fact the weakest September reading ever and was on tie with that in 2008,” said Yao Wei at Societe Generale.
Next door the fall was precipitous:
India’s manufacturing output recorded its biggest monthly decline since late 2008, going from robust growth to near stall speed in just five months and a fall in the new orders index for the sixth straight month suggested more weakness ahead.
And Japan’s recovery from the earthquake is now in reverse:
In Japan, a similar report on Friday showed the manufacturing sector contracted in September for the first time in five months, suggesting its economy was back in the doldrums after a short-lived earthquake-recovery boost.
Australia and Taiwan didn’t escape the damage:
The Australian Industry Group-PricewaterhouseCoopers Australian Performance of Manufacturing Index for the month was 42.3, down a point from its August level and well below the 50-point level that marks the line between expansion and contraction in activity. The HSBC Taiwan Purchasing Managers Index was at 44.5, down from 45.2 in August—its fourth consecutive monthly contraction—as new orders continued to shrink, HSBC Holdings PLC said.