Asia and Europe’s factory output wilted during September bringing back worries of the return of a recession for the euro zone along with the seventh consecutive quarter of less growth in China.
The new data indicated that countries throughout the world have yet to receive the benefit of the many monetary stimulus packages launched by the major central banks of the world over the last 60 days.
The latest purchasing manager indexes hint that the slowdown in China might not get much worse as well as in some of the larger European countries, but it showed that the third quarter was largely down on a global level.
Other data is due out later from U.S. officials and is expected to show that factories there, like their counterparts in Asia are feeling the negative effects from the slowdown radiating out of Europe.
Factories in the eurozone just suffered through the worst quarter since early 2009, a time when economies were in the worst recession since the end of WWII. There were not sign indicating that the largest economies in the region would do anything other than continue to contract for a number of months to come.
Although much of the data showed that the downturn was beginning to ease in Italian, Spanish and German industry, it steepened to even a larger margin in manufacturing in Britain. In August, unemployment was at a record high in the eurozone. However, investors did not seem to be affected negatively with the new data.
Britain’s manufacturing sector was hurt in September more than what was expected due to falling export orders and large increases in costs, which supported the opinion that the Bank of England will have to extend the purchases of assets once the current purchases are over in November.