Manufacturing downturn could be reversing across the globe
The slowdown in worldwide manufacturing that began in mid-2012 may be nearing an end.
Surveys of manufacturing companies around the world indicated that in December nearly as many companies reported that orders were rising as said that orders were continuing to decline.
The gains were concentrated in developing countries; China reported its best month in nearly two years.
But much of the Eurozone remained weak. France reported its worst monthly figure since early 2009, when the credit crisis was at its worst.
The figures are based on monthly surveys of manufacturers begun in the United States by the Institute for Supply Management and later imitated in more than a dozen countries by Markit, a British firm. Companies are asked whether business is better than in the previous month, both overall and by several measurements.
The ISM numbers use 50 as a neutral point. Any number above that indicates that more companies are reporting good news than are reporting that things are getting worse. The global figure, compiled by JP Morgan based on all the surveys, remained in negative territory in December, but it came closer to breaking even than it had in any month since May.
In the United States, according to the Institute for Supply Management survey, a plurality of companies reported declining orders for three months through September, but since then the figures have been positive, although by very narrow margins in November and December. Export orders appeared to be stronger in December than domestic orders, perhaps indicating some caution from domestic buyers as the so-called fiscal cliff deadline approached.
The weakness in the Eurozone has lasted more than a year, but for most of that period it was the peripheral countries that were holding down the reports. In December, though, both Germany and France, the two largest economies in the currency union, had worse order reports than the zone as a whole, something that had happened only once before since the end of 2007.
For much of this year, most of the major developing country exporters were reporting declining levels of new orders. But China and Brazil have shown positive margins for three months as the year ended, and South Korea had a narrowly positive number in December, its first in seven months.
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