Manufacturing stumble threatens global recovery

NEW YORK (CNNMoney) -- Manufacturing took a dive in China, the United States and across the eurozone in May, throwing the strength of the global economic recovery into doubt as production cooled.

Economists blamed the slowdown on rising energy prices and Japan's natural disasters, the effects of which are showing up for the first time in May's manufacturing data.

"It's a slowdown," said John Silvia, chief economist at Wells Fargo. "We had an economy that was in recovery mode. But now we've downshifted."

In the United States, the Institute for Supply Management's manufacturing index for May fell to 53.5, falling short of the forecast for a 57 reading.

A reading above 50 indicates manufacturing is still growing, but 53.5 shows growth is much weaker than expected, and a slower pace than would be considered healthy during a recovery.

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In the United Kingdom, the purchasing manufacturers index dropped to its lowest level since Sept. 2009. That decline was mirrored across the eurozone, with country after country reporting a slowdown in growth.

Germany, France, Italy, Spain and most of the continent's largest economies fell under the slowdown spell.

Meanwhile, China's equivalent index fell to a ten-month low, while exports fell due to sluggish demand from Japan.

"Growth in manufacturing activity is moderating, not crashing," analysts from HSBC Global Research wrote in a note to clients referring to China's output. For China, that outcome is not exactly unexpected, as the government has tightened monetary policy in hopes of cooling demand and curbing inflation.

On Wednesday, analyst reports were connected by one common thread: Manufacturing is entering a soft patch, but the bottom hasn't fallen out. Essentially, don't hit the panic button just yet.

"This month is much more the Japanese situation, and uncertainty over gasoline prices," Silva said. "But we do have an economy that is sub par."