London - Factory activity was at its weakest in years across much of the world during January, adding to worries trade tariffs, political uncertainty and cooling demand poses an increasing threat to global growth.
Weak Purchasing Managers Index (PMI) readings reinforce expectations central banks will put any further interest rate hikes on hold this year and fuel expectations a global economic slowdown is underway, as highlighted in a Reuters poll last month.
Trade-focused Asia appears to be suffering the most visible loss of momentum so far, with activity shrinking in China, although European economies are stuck in low gear and many emerging markets are sputtering.The euro zone has been rocked by protests in France, an auto sector struggling to regain momentum, political strife and rising trade protectionism. Manufacturing growth in the bloc was minimal last month, at a four-year low, and forward looking indicators suggest there will be no turnaround soon.
Germany’s manufacturing sector contracted for the first time in more than four years as Europe’s powerhouse was hit by trade tensions although activity in France rebounded, helped by jobs growth.