China has been pulling out of the global slump more decisively than any other major economy, thanks to an enormous stimulus program. A survey of purchasing managers at Chinese companies, which signaled expansion beginning in March, moved up to 54 in August from 53.3 in July.
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Japan reported an upturn in industrial production earlier this week. It said industrial production in July rose 2.2% from June, the best monthly gain since the global recession hit.
The euro zone's purchasing managers' index rose to 14-month high of 48.2 in August, up from 46.3 in July, closing in on the 50 level that would indicate activity has stopped falling. The surveys showed manufacturing in France is growing again, and has nearly steadied in Germany. But in some countries, such as Italy, Spain and Ireland, manufacturing declines continued.
As in the U.S., European businesses have cut inventories so sharply that even a modest revival of demand is likely to lead to increases in production.
Also, consider this chart of PMI readings from around the world:
The numbers are picking up across the globe. Yes -- there are still issues. But it's important to remember that no economy turns on a dime; there will be lingering problems that must be dealt with. But the signs are there that the world economies are turning around.
