Europe's factories starting to recover as lockdown measures are lifted

Major US manufacturers like Boeing have restarted production but the sector is far from back to normal

The report recalled that transportation problems due to the measures to stem the spread of COVID-19 prolonged delivery times sharply and receiving items from foreign countries was especially hard in May.

China's factory activity rose for a third straight month in May as companies got back to business after strict measures to contain the coronavirus were eased, but a deep contraction in export orders means the recovery remains sluggish.

So after crashing to its lowest reading in the survey's almost 22-year history in April, IHS Markit's Manufacturing Purchasing Managers' Index (PMI) recovered somewhat last month. Even as the Indian economy was struggling through a prolonged phase of lockdown before the outburst of coronavirus, the manufacturing PMI remained above 50 since 2018, which showed that businesses and manufacturers were optimistic about the recovery.

"There was a clear sense that - particularly in the euro zone - April was likely to be the bottom of the trough".

"However, the glass-half-full perspective is one where the rate of contraction has eased considerably since April, meaning - absent a resurgence of infections - the worst of the production downturn may be behind us".

Pockets of growth were generally linked to healthcare-related or personal protective equipment (PPE) products.

Overseas, Asian stocks were trading higher as a Chinese data released over the weekend showed the country's factory activity expanding in May. The index has been negative for 3 consecutive months.

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Rob Dobson, director at IHS Markit, said: "Those who typically see the glass half-empty will note that the United Kingdom manufacturing sector remained mired in its deepest downturn in recent memory".

Survey data also showed export-dependent Asian economies that returned to work earlier are still seeing their recoveries dampened by subdued demand elsewhere.

Japan's factory activity shrank at the fastest pace since 2009 in May, a separate private sector survey showed while South Korea also saw manufacturing slump at the sharpest pace in more than a decade.

Economic activity in the US manufacturing sector contracted for the third straight month in May amid mounting COVID-19 fallout, the Institute for Supply Management (ISM) reported Monday.

"With increasing numbers of companies restarting production, we should see some improvements in the output trend in coming months, and it was reassuring to see signs of the downturn already starting to ease in May, suggesting April was the eye of the storm as far as the production collapse is concerned", Mr. Williamson said.

"Concurrently, the 12-month outlook for output remained weak, with the level of positive sentiment only slightly above April's all-time low".

The Institute of Supply Management reported on Monday that USA manufacturing activity rose from an 11-year low in May, the strongest sign yet that the worst of the economic downturn could be in the rear-view mirror.

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