Worldwide focus on the pace of the recovery

Between the Eurozone's largest four economies there was strong evidence of diverging fortunes, with the bloc's manufacturing sector overall expanding at its slowest pace since February, surveys showed yesterday.

Equivalent figures from the United States showed the manufacturing sector chalked up a 13th straight month of expansion, helping to calm fears that economic growth was stagnating, and offering hope of new jobs in that sector.

Manufacturing growth in Germany slowed in August although other recent data show Europe's biggest economy is expanding fast. Business in France accelerated but Italy and Spain saw their manufacturing indexes slip backwards.

Silvio Peruzzo at Royal Bank of Scotland said: "Globally there is a slowdown in the trade cycle which first affects the economies which are reliant on that.

"Just as they were benefiting from the acceleration in Q4 2009 and Q1 2010, they will now be subject to the downturn and this will amplify the divergence we are seeing."

Two China manufacturing surveys showed activity picked up last month after a government-engineered slowdown, and Indian factories stayed in top gear after Asia's third-largest economy grew at its fastest rate in nearly three years in the last quarter.

Factories in Russia also cranked up output, expanding at their fastest rate in 28 months largely thanks to the strong domestic demand.

HSBC's purchasing managers' index (PMI) for China rose to a three-month high of 51.9 in August from 49.4 in July, while the official index also rose, to 51.7 from 51.2.

Even China, however, which by some measures has already overtaken Japan as the world's second-largest economy, is not entirely immune to global economic headwinds with its PMI showing factory activity

and new orders growth slowing markedly.