Global manufacturing data raises growth fears
Figures show contraction in May output in China, the US and Europe, indicating world economy still weak and in need of central bank support
Manufacturers in China, the United States and Europe struggled last month as demand fell, suggesting an ailing world economy that still needs a steady diet of central bank support.
Output at US factories declined in May for the first time in six months, the Institute for Supply Management reported, while China's massive manufacturing sector shrank for the first time in seven months, adding to concerns that the world's two largest economies were losing momentum in the second quarter.
Euro-zone manufacturing contracted for the 22nd consecutive month, although the depth of the downturn eased for the first time in four months.
The International Monetary Fund cut in half its forecast for German growth this year, but said Europe's biggest economy would experience a recovery in the second half of the year.
"Amid still elevated euro area uncertainty, we now project [gross domestic product] in Germany to expand at 0.3 per cent," compared with a previous forecast of 0.6 per cent, the IMF said. Growth "is expected to be weak".
In the US, the data bolstered the view that the economy was undergoing yet another spring swoon after expanding at a 2.4 per cent rate in the first three months of the year.
That makes it unlikely the Federal Reserve would soon start to scale back the US$85 billion in bonds it is buying each month. Fed chairman Ben Bernanke last month said those purchases could be cut at one of the central bank's "next few meetings".
