China Manufacturing Slows Further; Australia GDP Drops by Most in 20 Years; US Manufacturing Slows

To follow up on what I wrote in March China’s slowdown continues:

HONG KONG (MarketWatch) — China’s manufacturing activity expanded in May at its weakest pace in three quarters, as the economy faced headwinds of high inflation and government efforts to rein in prices, according to rival surveys of companies released Wednesday.

One line caught my eye immediately:

However, analysts said Wednesday that the weaker growth implied in the PMIs isn’t likely to sway the government from its current policy direction, with Credit Suisse analysts saying that “Beijing is fine to see a softening in growth.”

… and a softening in growth is what Beijing is gonna get.

On an obviously related note Australian economy sees sharpest contraction since 1991:

Australia has reported its biggest quarterly fall in gross domestic product (GDP) in 20 years.

Its economy contracted by 1.2% in the first three months of the year compared with the previous quarter, the latest government figures showed.

The government said flooding and cyclones in the resource rich states of Queensland and Western Australia had a significant impact on growth.

Australia’s economy is heavily reliant on exporting its natural resources.

“The economy has hit a temporary pothole courtesy of the natural disasters this year,” said Besa Deda of St George Bank.

Ah yes, the weather. I’m sure the global and in particular the Asian slowdown has NOTHING to do with it ;)

Growth figures are being revised down in the US:

… and Chicago manufacturing gauge nosedives:

A Chicago-area manufacturing gauge dropped by the largest amount in nearly two-and-half years in May, in a further sign that the rise in oil prices and the Japanese earthquake have affected activity.

The Chicago PMI fell to a reading of 56.6% in May, the lowest reading since Nov. 2009, from 67.6% in April.

While that reading is still significantly above the 50-line indicating growth, the eleven-point drop is the biggest one-month deceleration since Oct. 2008 and was worst than the 60% reading that economists polled by MarketWatch anticipated.

Indexes for production, new orders and order backlogs each dropped by double digits. Inventories jumped, which in this case is more likely an indication of unplanned gains due to a lack of sales than stocking up in anticipation of better times ahead.

Say Hi to the global slowdown and a double dip recession in the making …

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