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 While the pulse of activity was livelier in other parts of Asia -
Japan, India and South Korea - they too shared a common condition of
slowing inflation.
Central banks from Switzerland to Turkey via Canada and Singapore
have already loosened monetary policy in the past few weeks.
The European Central Bank also announced a near-trillion-euro
quantitative easing program in a bid to revive inflation and drive
up growth, though much of the bloc's Purchasing Managers' Index
survey was collated before that announcement.
"There are a lot of places where central banks are focusing on
easing rather than anything else. In the euro zone the ECB is going
all-out now," said Jacqui Douglas, senior global strategist at TD
Securities.
"Looking at the rest of Europe we are expecting more easing from
Sweden and Norway, that is where most central banks are leaning
right now. There is no real rush to move ahead with rate hikes."
Markit's final PMI reading for the euro zone, published on Monday,
was 51.0, in line with the flash estimate. Although at a six-month
high, it was only just above the 50 mark that separates growth from
contraction. In December the index came in at 50.6.
 Worryingly for policymakers, firms cut prices in January at the
steepest rate since mid-2013. Data on Friday showed annual inflation
was a record-equaling low of -0.6 percent in January across the 19
nations using the euro.
In Britain, manufacturing grew slightly faster but factories cut
prices at the fastest pace since 2009. The Bank of England will keep
interest rates at a record low until at least October, later than
previously thought, a Reuters poll found last week. [GB/PMIM]
[BOE/INT]
"With oil prices having stabilized at around $45 per barrel now, it
seems likely that lower oil prices should continue to enable
manufacturers to lower prices and so support demand," said Paul
Hollingsworth at Capital Economics.
Still to come later on Monday is a sister manufacturing survey from
Markit covering the United States, as well as the Institute for
Supply Management's U.S. factory index, which is forecast to have
slipped to 54.5 in January from 55.1. <ECONUS>
EASING CHINA?
Earlier, a pair of surveys from China showed manufacturing
struggling at the start of 2015 in the world's second biggest
economy.
The Chinese HSBC/Markit PMI inched up a fraction to 49.7. But of
more concern the official PMI, which is biased towards large
factories, unexpectedly showed activity shrank for the first time in
nearly 2-1/2 years.
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The reading of 49.8 in January was down from December's 50.1 and
missed a median forecast of 50.2. The report showed input costs
sliding at their fastest rate since March 2009, with lower prices
for oil and steel playing major roles.
Ordinarily, cheaper energy prices would be good for China, one of
the world's most intensive energy consumers, but many economists
believe the phenomenon is a net negative for Chinese firms because
of its impact on demand.
The PMIs only fueled bets on a weaker yuan and that more monetary
easing was in store in Beijing too.
"China still needs decent growth to add 100 million new jobs this
year, plus China is entering a rapid disinflation process," ANZ
economists said in a note to clients.
"We (think) the People's Bank of China will cut the reserve
requirement ratio by 50 basis points and cut the deposit rate by 25
basis points in the first quarter."
The downdraft has also spread into China's hitherto buoyant services
sector, the lone bright spot in the economy last year. Service
activity expanded at its lowest level in a year.
Slightly better news came from Japan, where the central bank has
been pursuing an aggressive bond-buying campaign for over a year in
a bid to revive growth and shake the country out of decades of
deflation.
The final Markit/JMMA PMI edged up in January as the sustained
weakness of the yen drove up exports. Improving exports were also a
feature of South Korea's PMI which returned to growth for the first
time in five months.
India's manufacturing activity continued to grow, though the
headline index eased a touch but importantly for the prospect of
more policy stimulus, cost pressures were the mildest in 70 months
as commodity prices fell.
(Editing by Ross Finley and John Stonestreet)
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