China manufacturing slows further, HBSC data show (by Chris Oliver)

HONG KONG (MarketWatch) -- China's factory activity contracted for a seventh straight month in May, according to HSBC data released Friday. The final reading of the HSBC manufacturing Purchasing Managers' Index fell to 48.4 in May on a 100-point scale, compared to a April's 49.3, and weaker than an initial "flash" reading of 48.7. Among sub-components of the PMI, measures of new orders and output both fell below the 50-level which indicates conditions are now in contraction. "May's final reading confirmed that manufacturing growth slowed further on weakening demand from both global and domestic markets," HSBC said in a note accompanying the PMI.

Euro-zone May manufacturing PMI falls to 45.1 (by William L. Watts)

FRANKFURT (MarketWatch) -- Manufacturing activity in the 17-nation euro zone shrank at the fastest pace in three years in May, according to the Markit purchasing managers' index for the sector released Friday. The index fell to 45.1 from 45.9 in April and was little changed from a preliminary estimate of 45.0. A reading of less than 50 signals a contraction in activity. "Euro-zone manufacturers reported a deepening downturn in May, indicating that the damage to the real economy caused by the region's financial and political crises continues to spread across the region," said Chris Williamson, chief economist at Markit. The data indicates the sector is contracting at a quarterly pace of around 1%, Markit said.

U.K. May manufacturing PMI plunges to 3-year low ( by William L. Watts)

FRANKFURT (MarketWatch) -- The May purchasing managers' index for Britain's manufacturing sector released on Friday fell sharply to post a three-year low, indicating a steeper-than-expected contraction in activity. The Markit/CIPS manufacturing PMI fell to 45.9 from a reading of 50.2 in April. Economists surveyed by Dow Jones Newswires had forecast a reading of 49.9. A reading of less than 50 indicates activity shrank. "Perhaps of greatest concern is that this month's drop is not simply linked to the ongoing crisis of the euro zone, but to increasing weakness of the U.K. domestic market, with overall order books collapsing at a faster rate than export orders," said Rob Dobson, senior economist at Markit.

U.S. May ISM factory index declines modestly (by Greg Robb)

WASHINGTON (MarketWatch) - Conditions for the nation's manufacturers slipped in May after reaching its highest level since last summer in April, the Institute for Supply Management reported Friday. The ISM index fell to 53.5% in May from 54.8% in April. This was weaker than expected. The consensus forecast of estimates collected by MarketWatch was for the index to fall to 54.0%. Readings above 50 indicate expansion. Below the headline, the report had some strong elements. The new-orders index rose to 60.1% in May from 58.2% in the prior month. The employment index slipped to 56.9% in May from 57.3% in April. Production fell 5 points to 55.6% while prices dropped sharply.