LONDON/NEW YORK, Sept 23: A flood of new orders gave a boost to European and Chinese firms in September although weakness in US factory activity tempered evidence of a healing global economy.

Purchasing managers’ indexes, surveying thousands of companies across the globe, showed a welcome pick-up in the eurozone and China although slower growth in the United States’ manufacturing sector backed the Federal Reserve’s decision last week to maintain its support for the world’s largest economy.

Financial data firm Markit said its “flash,” or preliminary, US Manufacturing Purchasing Managers Index (PMI) retreated to 52.8 this month from 53.1 in August, confounding analysts’ forecasts of an improvement. A reading above 50 indicates expansion.

Output growth accelerated but new order inflows slowed, suggesting “production growth is likely to weaken in the fourth quarter unless demand picks up again in October,” said Chris Williamson, Markit’s chief economist.

The Fed surprised markets last week by postponing a reduction of its massive, $85-billion-a-month bond-buying program, while downgrading its growth forecasts.

Conflicting views from policymakers of when the wind-down will come has left markets uneasy, while the threat of another fight on Capitol Hill over how much the United States can borrow loomed large.

The uncertainty emanating from Washington took the shine off a German election triumph for Angela Merkel which confirmed she would remain Europe’s dominant leader as the continent tries to put its debt crisis to bed.

Still, the bloc should be able to take on its continuing challenges from a position of improving economic growth, after the region pulled out of recession in the second quarter.

Markit’s Eurozone Flash Composite PMI jumped to 52.1 in September from last month’s 51.5, its highest since June 2011 and beating expectations for a reading of 51.9.

The pace of expansion in the bloc’s dominant services sector also beat all forecasts in a Reuters poll and the surveys suggested the recovery was becoming more broad-based. Business at firms in Germany, Europe’s largest economy, expanded at a faster pace than last month and in France, the second biggest, activity increased — albeit marginally — for the first time in 19 months.

Markit said the composite eurozone PMI, which surveys both manufacturing and service sector companies across the region and is seen as a good guide to economic growth, pointed to a 0.2 per cent expansion this quarter, matching a Reuters poll taken earlier this month.

“Today’s PMI figures support the view that the eurozone recovery is gradually becoming more entrenched and, as such, further reduce the odds that the ECB will follow up its forward guidance rhetoric with action,” said Martin van Vliet at ING.

New business in the bloc increased again this month, boding well for October activity, and it was a similar story in China where new export orders jumped to a 10-month peak.

Encouragingly, domestic demand also showed resilience, with new orders rising to a five-month high.

The Chinese flash HSBC PMI climbed to 51.2 this month from August’s 50.1, hitting a high not seen since March. A breakdown of the data showed 10 of 11 sub-indices rose in September.—Reuters