BEIJING (Reuters) – Chinese manufacturing picked up steam in September after a mid-year lull, easing concerns of a renewed downturn in global growth, although other leading Asian economies showed some signs of softer business activity.
Manufacturing activity slowed in India in September and contracted in South Korea and Australia, surveys showed. Data on Thursday showed Japanese manufacturing contracted for the first time in 15 months and reports later on Friday are expected to show slowdowns in the United States and Europe.
Still, China dominated.
"The PMIs are a very good gauge of the outlook for industrial production in China, and they tell a beautiful story," said Rob Henderson, head market economist at National Australia Bank in Sydney.
"Fears of a substantial downturn have proved unfounded and this should put to rest a lot of the worries about the global outlook."
Indeed, the Asian purchasing managers indexes (PMI) followed signs that activity in the United States had picked up a little in the third quarter, easing worries about a fresh slump in the world's top economy.
New U.S. jobless claims fell last week and manufacturing in the Midwest region grew faster than expected in September.
China's official PMI rose to 53.8 in September from 51.7 in August, well above a median forecast of 52. The data pushed LME copper to a two-year high, lifted the Australian dollar and gave Asian stocks (.MIAPJ0000PUS) a boost.
India's manufacturing sector expanded for the 18th straight month, but the pace slowed to a 10-month low.
Indian manufacturing had stayed strong earlier this year as Chinese activity had slowed.
"The manufacturing sector shows signs of cooling after a red-hot pace earlier in the year," said Frederic Neumann, co-head of Asian Economics Research at HSBC.
"Capacity constraints may be partly responsible for this, in addition to the fading fiscal stimulus."
In Australia, among the few developed economies to avoid a recession after the global financial crisis, a strong local currency and soft domestic demand led to the first contraction in manufacturing activity in 2010, a survey showed.
PMIs use indicators such as new orders, employment, exports and order backlogs, to gauge the strength of manufacturing, and are considered a leading indicator of broader economic activity.
A reading above 50 indicates expansion, and below that a contraction. Further, a reading above 50 that is higher than the previous month indicates a quickening pace of activity, while a 50-plus reading lower than the previous month shows a slowdown.
Q2 GDP TWEAKED
The ISM index, measuring U.S. manufacturing activity and due to be released later on Friday, is expected to ease to 54.5 in September from 56.3 in August, underscoring the tepid nature of the U.S, recovery.
On Thursday, the U.S. government nudged its second-quarter growth estimate up to a 1.7 percent annualized pace from 1.6 percent after growth in consumer spending for April to June was revised up to the fastest pace in three years.
Though analysts think U.S. economic activity may have picked up in the September quarter, it remains far from robust and the Federal Reserve is expected to start a fresh round of monetary easing as soon as November.
"We can stop talking about a double dip, but we are going to grow much more slowly than most people's memory of a recovery will cause them to expect," said Jerry Webman, chief economist at OppenheimerFunds in New York.
In Europe, debt woes dominated after Ireland said it faced a worst-case bailout bill of more than 50 billion euros ($68 billion) for its distressed banks and Spain lost its AAA credit rating.
(Writing by John Mair; Editing by Neil Fullick)
FRANKFURT (AFP) – IMF chief Dominique Strauss-Kahn said in a newspaper interview on Friday that he did not expect Ireland to call on a European rescue fund to help the country cope with its financial crisis.
Asked by German business daily Handelsblatt whether Dublin needed to tap the fund, the head of the International Monetary Fund said that "we are not expecting it".
"We are ready in case we need to contribute," he added nonetheless.
"The situation in Ireland is very different from that in Greece... The Irish government has already put in place a series of solid fiscal and banking sector measures," he said.
Ireland revealed on Thursday that bailing out Anglo Irish Bank could cost nearly 35 billion euros (44 billion dollars), which could drive the public deficit to a record 32 percent of gross domestic product.
Eurozone countries created the European Financial Stability Facility in May at the height of the Greek debt crisis to help out members that get into fiscal trouble and cannot finance their budget shortfalls through the bond market.
It was granted authority to raise up to 440 billion euros by issuing bonds guaranteed by eurozone member countries with solid credit ratings, which would be used to help countries in need.
The rescue fund's head, Klaus Regling, ruled out a bailout on Thursday.
SEATTLE (Reuters) – Microsoft Corp Chief Executive Steve Ballmer did not get his maximum bonus for the last fiscal year, despite notching the company's highest ever sales, as he took a hit for missteps on phones and not moving fast enough to counter Apple Inc's iPad.
Ballmer, 54, received a cash bonus of $670,000 for the fiscal year ended June 30, equal to his salary, but only half of the maximum bonus payout, according to a filing with securities regulators on Thursday.
The world's largest software company commended Ballmer for increasing sales 7 percent to a record $62.5 billion, cutting costs, launching the latest versions of Windows and Office, and pushing along cloud computing and gaming efforts.
But a discussion of Ballmer's pay in the company's annual proxy filing also referred to the "unsuccessful launch of the Kin phone, loss of market share in the company's mobile phone business, and the need for the company to pursue innovations to take advantage of new form factors."
Microsoft's Kin -- a feature phone aimed at teenagers -- flopped this year and was dropped less than three months after launch with poor sales.
Its Windows mobile phone software has been losing share sharply over the last few years to Apple's iPhone, Google Inc's Android and Research in Motion Ltd's BlackBerry.
Microsoft is fourth in the U.S. market for smartphone operating systems with a share of less than 12 percent, according to research firm comScore.
SLOW IPAD RESPONSE
The company has also been in the spotlight for the lack of a quick response to Apple's iPad -- a revolution in what the industry calls "form factor" -- which has sold more than 3 million since launching earlier this year.
Ballmer said in July that slates and tablets running Windows would appear as soon as they are ready.
Ballmer's bonus hit the "target award" of 100 percent of his salary, Microsoft's filing said. He was eligible to receive between zero and twice his base salary in bonus.
With his bonus, Ballmer got a total direct pay package of $1.34 million for fiscal 2010, about 6 percent higher than $1.26 million the year before.
Microsoft froze base salaries for its top executives in the last fiscal year due to the uncertain economy.
The company no longer issues stock options for employees, and at his own request, Ballmer gets no stock awards.
He already owns 408 million shares, or 4.75 percent of the company, worth about $10 billion. He is the 16th richest American, according to Forbes magazine.
(Editing by Richard Chang and Dhara Ranasinghe)