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International Manufacturing Roundup: China, Canada, Brazil, EU

While no one is claiming the worldwide economic recovery is going to jump into high gear imminently, manufacturing activity news out of several key areas appeared promising. That said, the European Union is far from being among the group...not even close.

An HSBC/Markit monthly study on Brazilian manufacturing activity found the third straight month of gains in its Purchasing Managers' Index (PMI). Its PMI now sits at 51.1 The recovery can best be described as tepid, but there is some momentum behind it, and manufacturers are starting to become optimistic, according to reports. The government-based stimuli seem to be helping.

In China, its activity in March was bolstered by improvements in demand within the automotive, electronics and tobacco industries. Government-released statistics indicate its PMI rose 2.1 points in March and now exceeds 50. Like that of Brazil and most PMI measures, any level exceeding 50 is considered positive growth/expansion. Market-watchers expressed surprise at the level of optimism found throughout China's manufacturing sector as stories, perhaps exaggerated ones, of a potential Chinese slowdown surfaced in early parts of this year.

Meanwhile, Canada's manufacturing statistics also showed promise. Its PMI, done in conjunction with RBC and Markit, found the index at 52.4, up from February by more than a half-point. Analysts believe better conditions in the United States have prompted gains in areas such as machinery, lumber and automotive production.

However, the European Union is looking at near unilateral manufacturing woes. The EU's PMI declined 1.3 points to 47.7, a low for 2012 thus far. Even stalwarts Germany and France showed signs of the EU's greater problems, as it is known for exporting to the nations now in the greatest financial straits. Just two nations out of the entire bloc—Ireland and Austria—reported a manufacturing output uptick. Not surprisingly, massive unemployment problems in the EU have garnered increased media attention of late.

Brian Shappell, CBA, staff writer