An employee walks next to loaves of bread in a bread factory in Saint-Vulbas, France on January 18, 2024. (PHOTO / AFP)

LONDON / TOKYO - Global factories delivered a largely patchy performance at the start of 2024, surveys showed on Thursday, as disruption to Red Sea shipping delayed deliveries in Europe.

The prolonged downturn in euro zone manufacturing activity eased for a third month but could stretch through this quarter as a majority of sub-indices in the region's Purchasing Managers' Index (PMI) remained within the contraction zone.

HCOB's final euro zone manufacturing PMI, compiled by S&P Global, climbed to 46.6 in January from December's 44.4, matching a preliminary estimate, but still firmly below the 50 mark separating growth in activity from contraction.

In Britain, which left the European Union four years ago, factories recorded an 18th consecutive month of contraction albeit shallower than in December

Almost all sub-indices moved in a positive direction while those covering pricing showed inflationary pressures may have weakened last month.

Inflation in the euro zone eased as expected last month but underlying price pressures fell less than forecast, official preliminary data showed on Thursday.

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The downturn in Germany's manufacturing industry, which accounts for about a fifth of Europe's largest economy, eased in January and it was a similar picture in France.

Italy's manufacturing sector contracted in January for a tenth straight month but at a significantly slower pace than at the end of last year while in Spain the pace of contraction also slowed markedly.

In Britain, which left the European Union four years ago, factories recorded an 18th consecutive month of contraction albeit shallower than in December.

"While the UK and the euro zone have turned the corner and see an accelerated recovery starting 2024, today’s sub-50 PMI still indicates contraction and concerns remain," said Boudewijn Driedonks at consultancy  McKinsey &  Company.

"The ongoing Red Sea crisis and supply chain disruption is a case in point - just as inflation is beginning to cool-off."

Asian mix

The picture was patchy for Asian economies. South Korea's factory activity expanded in January for the first time in 19 months on improved orders for goods in key markets such as the United States.

But activity shrank in Taiwan region and Malaysia, and expanded at a slower pace in the Philippines, the surveys showed.

Manufacturing activity in Japan also shrank for an eighth straight month in January as output and new orders slumped, with some analysts warning of the hit from production suspension at Daihatsu, a unit of auto giant Toyota Motor Corp, opens new tab.

The Toyota group's output plan has a critical impact on Japan's economy as it affects many parts suppliers spread across the country.

READ MORE: Global slowdown fears darken prospects for Asian factories

Japan's industrial output rose in December but manufacturers surveyed by the government expect output to plunge 6.2 percent in January, data showed on Wednesday.

India, by contrast, saw manufacturing improve substantially in January with factory activity expanding at its fastest pace in four months on robust demand.

The International Monetary Fund on Wednesday revised up its growth forecast for Asia to project an expansion of 4.5 percent this year.