Chinese factory recovery continues; markets await UK and eurozone data – business live

Japan’s factories are roaring ahead, at the fastest pace in four years.

The Japanese manufacturing PMI has jumped to 54.8 in January, up from 54.0 in December, a level that signals a strong expansion.

Firms reported that output and new order growth rates accelerated last month. This led to rising backlogs of work, even though firms took on more staff – and passed rising costs onto customers.

Joe Hayes, Economist at IHS Markit, which compiles the survey, says the picture looks bright.

Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business.

Today we discover how the world’s manufacturing sector fared last month, as data firm IHS Markit releases its monthly PMI reports.

These surveys are based on interviews with purchasing managers across the globe, and give an insight into how factories are performing.

And the early signs are encouraging! China’s factory sector grew at its fastest pace in 13 months, according to the Caixin/Markit manufacturing PMI. It hit 51.5 for January – matching December’s reading – which means the sector has strengthened for eight months in a row.

Chinese firms reported a rise in new work and new orders, leading to an increase in output. But they also kept cutting jobs, as companies looked to downsize in the face of pressure from Beijing to cut pollution.

Dr. Zhengsheng Zhong of CEBM Group says:

Investors will be keen to see Markit’s data from across the eurozone, and the UK, to see how Europe’s economy began 2018.

European markets are expected to open higher, after dropping earlier this week.

(@IGSquawk)

9am GMT: Eurozone factory PMI for January

9.30am GMT: UK factory PMI for January

1.30pm GMT: US weekly jobless figures

3pm GMT: US manufacturing PMI reports