Global economy: Manufacturing solid but strain of energy costs, supply disruptions starts to show
SPY•Global manufacturing activity remained solid in October, but rising energy costs and supply disruptions are squeezing factories. The euro zone PMI eased to 52.7 from 52.9, while China's slipped to 52.0 from 52.1 and manufacturing growth slowed in Japan, South Korea and Taiwan.
1. Factory growth holds
Global manufacturing activity remained solid in October, though surveys showed factories facing rising energy costs and supply-chain disruptions that squeezed margins. The euro zone's manufacturing PMI eased to 52.7 from 52.9 in September, above a preliminary estimate of 52.4; readings above 50 indicate growth.
2. Asia slows
Factory activity across Asia continued to expand, but growth slowed in China, Japan, South Korea and Taiwan. China's manufacturing PMI stood at 52.0, just below September's 52.1; Japan recorded its slowest expansion in seven months, while South Korea's growth slowed to an eight-month low.
3. Prices pressure demand
The article said high fuel and food prices were weighing on consumption and business confidence. Euro zone input prices rose at their fastest pace since May, while output prices also increased rapidly. India's manufacturing growth slowed as domestic demand and hiring weakened, partly cushioned by a surge in export orders.
