WASHINGTON |
(Reuters) - It was fun while it lasted.After several strong quarters, the global economic recovery appears to be sputtering. In particular, the industrial sector, a key driver of the bounce-back from a historic worldwide recession, looks to be fraying.
"People need to seriously consider the scenario where global industrial growth, once again, starts to throttle back -- because it's not that far away," said Lakshman Achuthan, managing director of the Economic Cycle Research Institute.
A report on U.S. durables goods orders due Wednesday should give fresh insight into manufacturing demand after an unexpected plunge in the Philadelphia Federal Reserve Bank's index of May factory activity caught investors by surprise.
Economists are looking for a 2.2 percent decline in durables orders for May, according to a Reuters poll. A closely watched measure of non-defense orders excluding aircraft, seen as a proxy for business investment, is projected to inch up just 0.2 percent.
"This week will bring what is likely to be another round of discouraging news, with May's durable goods orders data pointing to further evidence that the manufacturing recovery is losing momentum," said John Higgins, economist at Capital Economics.
The deterioration in U.S. manufacturing is being exacerbated by a slowdown in Japan, which is essentially in recession in the wake of a devastating earthquake and tsunami.
