By Paul Hannon 

The global economy seems likely to avoid a further slowdown next year, with a raft of supportive government policies lifting activity in China and the U.S. still on a robust path.

However, Europe remains a weak spot, according to surveys of purchasing managers released Monday, with few signs that a long decline in manufacturing is nearing its end.

Global economic growth steadied in the three months through September, as output in the Group of 20 leading economies expanded at the same rate as in the second quarter. But while there are signs the Federal Reserve's rate cuts earlier in the year have helped to keep the U.S. economy on a robust growth path, the European Central Bank's more recent efforts have had a less noticeable impact.

Figures released Monday by China's National Bureau of Statistics showed industrial output for November was 6.2% higher than a year earlier, accelerating from a 4.7% year-over-year increase in October. According to a separate release, China's retail sales climbed 8% in November from a year earlier, compared with October's 7.2% increase.

After the release of the data, economists at UBS and Oxford Economics raised their forecasts for 2020 Chinese economic growth to 6%, up from earlier predictions for 5.7% growth.

But many economists remain cautious about the sustainability of any improvement in China's economy.

"The current international environment remains complicated and the economy still faces downward pressure," said Fu Linghui, a spokesman for China's statistics bureau.

There are fewer questions about the current state of the eurozone economy, which continues to flirt with stagnation. Surveys of purchasing managers across the eurozone Monday pointed to a sharper decline in the export-oriented manufacturing sector in December, offset by a slightly stronger expansion in the more domestically focused services sector.

Data firm IHS Markit's composite Purchasing Managers Index for the currency area -- a measure of private sector activity -- was unchanged at 50.6, pointing to meager growth. Over the three months of the year's final quarter, the PMIs were the weakest since 2013, when the currency area was starting to emerge from its twin government debt and banking crises.

"The eurozone economy closes out 2019... with businesses struggling against the headwinds of near-stagnant demand and gloomy prospects for the year ahead," said Chris Williamson, chief business economist at IHS Markit.

Eurozone factories have seen their overseas sales slow sharply since early 2018, partly reflecting a global cooling of trade linked to an exchange of tariff increases between the U.S. and China.

The ECB's economists Thursday lowered their economic growth forecast for next year to just 1.1%, the latest in a series of downgrades that stretches back to June 2018.

However, ECB President Christine Lagarde gave no indication that policy makers are considering another round of stimulus measures to follow those announced in September, instead pointing to "some initial signs of stabilization."

"What I think gives us some hope... is the fact that those downside risks that we had on the horizon are less pronounced," she said.

The surveys were completed before there were signs Friday that Ms. Lagarde's assessment of the risks facing the eurozone may turn out to be correct. On that day, the U.S. and China announced a truce in their year-and-a-half-long dispute, while the result of the U.K.'s election eased some uncertainty about the way in which the country will leave the European Union.

In the U.K., a similar survey of purchasing managers pointed to another month of declining activity, led by the sharpest contraction in manufacturing since July 2012.

According to Duncan Brock, group director at the Chartered Institute of Procurement & Supply, that decline reflected a reluctance among businesses to make new investments ahead of the election and the message it would send about the likely shape of Brexit.

But he warned that the vote hasn't removed all the uncertainties that face businesses.

"The Brexit path is still littered with obstacles and the need for strong negotiation skills for a future EU agreement will be paramount to avoid this downward slide becoming the economic landscape for an extended period," said Mr. Brock.

In Japan, surveys of purchasing managers pointed to stagnation in December, following a similar outcome in November. However, Prime Minister Shinzo Abe's government earlier this month approved a $120 billion stimulus program, Japan's largest in more than three years, citing the same global economic risks that have led central banks in the U.S. and Europe to cut interest rates.

--Grace Zhu, Liyan Qi and

Bingyan Wang

Write to Paul Hannon at paul.hannon@wsj.com

(END) Dow Jones Newswires

December 16, 2019 07:54 ET (12:54 GMT)

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