06/03/2024

Factory Activity Shows Signs of Recovery in May

Global factory activity offered signs of recovery last month

Global factory activity offered signs of recovery last month as contraction slowed in the euro zone and manufacturing activity in most of Asia's largest economies picked up, although the U.S. stood apart with output weakening for a second straight month, private business surveys showed on Monday.

The softness in the U.S. notwithstanding, improved overall business sentiment suggests more solid momentum in the global economy, defying slowdown expectations prevalent earlier this year, and offering a reason for central banks to hold off cutting interest rates or to proceed cautiously when they do.

While a more solid expansion in Asia took hold, the surveys also showed signs that the euro zone's manufacturing sector may have turned a corner last month after a long downturn. Activity in Germany and France, the bloc's two biggest economies, showed signs of bottoming out.

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