Global factory output gaining

Purchasing Managers Indexes (PMI) published on Friday pointed to gradual gains in global economic activity among thousands of manufacturers. US output was fastest since April 2011. China's official PMI topped expectations.

New export orders in China, Japan, South Korea and India expanded simultaneously, a trend which economists said was due partly to a gradual improvement in Europe.

'Overall, the data is positive for global demand,' said Radhika Rao, a Singapore-based economist. There were reasons to be 'cautiously optimistic,' she said.

Zhang Liqun, an economist with the Chinese think-tank Development Research Center, said China's PMI of 51.4 for October indicated a 'preliminary stabilization in the economy.'

China's PMI in September had been 51.1. Anything over 50 signals expansion.

South Korea's PMI pointed to factory activity expanding in October – for the first time in five months. Taiwan, a key supplier for global technical chains, was at its fastest since early 2012.

US index surprises

The US purchasing managers index rose for a fifth straight month to 56.4 in October, up slightly from September and defying analysts' forecasts of an overall decline.

The US index's three components – new orders, production and employment - all remained moderately in growth territory.

Robert Kavciv, an economist with BMO Capital Markets, said the US manufacturing sector had staged a strong comeback, despite the shutdown 'drama' from October 1-16 as President Barack Obama was challenged by hard-line Republicans in Congress.

Britain's PMI for manufacturing stood at 56 in October, according to the data company Markit.

It was a further sign that important export markets were 'either growing or at least improving,' said Christian Schulz, senior economist at Berenberg.

Manufacturing activity also picked up somewhat in Canada and slightly in Brazil