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Global manufacturing fluctuates, China's growth slows

Global manufacturing showed preliminary mixed results Monday from China and Europe.

By Sonali Basak
Global manufacturing fluctuates, China's growth slows
China's manufacturing slows as the country rebalances its economic priorities. Meanwhile, overall European manufacturing strengthens but is offset by weak progress in France manufacturing and in service sectors. (File/UPI/Stephen Shaver) | License Photo

November manufacturing shows mixed results globally, with China's slowing slightly and unexpectedly. Meanwhile, European manufacturing data showed a strengthening of the sector.

The preliminary figure shown by the HSBC Purchasing Manager's Index fell to a three-month low, inching just below economist expectations. It still indicates an expansion of the economy, though at a slower rate. The final figure will be released Jan. 2.

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The index fell to 50.5 in December from 50.8 in November. It compares with an economist estimate of 50.9.

This comes as costs and wages rise in China, the world's second largest economy, and manufacturers relocate operations to neighboring countries. It also comes as China rebalances economic priorities away from a traditionally industry-driven economy toward being more market friendly. This could benefit the private sector more than state-owned industries.

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European manufacturing beat expectations and reached a 31-month high in December. A Markit Economics purchasing manager's index rose to 52.7 up from 51.6 the prior month. This compares with a 51.9 estimate by economists.

Though manufacturing was strong, led by Germany's speeding up in the sector, GDP growth remained flat at 0.2 percent. Manufacturing progress was offset by a weak service sector.

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Strong manufacturing in Germany was also offset by a weak showing by France, which is on the cusp of recession.

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The Institute for Supply Chain Management reported November U.S. manufacturing to spike unexpectedly to its highest level in more than two years while economists had expected a slow decline. Earlier this month, various figures of Chinese and European growth showed strengthening overall, though December figures might indicate that November figures were inflated.

[Bloomberg] [Wall Street Journal] [IB Times] [Telegraph]

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