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London - European and Chinese factories slashed prices in January as production flatlined, heightening global deflation risks that point to another wave of central bank stimulus in the coming year.
While the pulse of activity was livelier in other parts of Asia - Japan, India and South Korea - they too shared a common condition of slowing inflation.
Central banks from Switzerland to Turkey via Canada and Singapore have already loosened monetary policy in the past few weeks.
The European Central Bank (ECB) also announced a near-trillion-euro quantitative easing programme in a bid to revive inflation and drive up growth, though much of the bloc's Purchasing Managers' Index survey was collated before that announcement.
"There are a lot of places where central banks are focusing on easing rather than anything else. In the eurozone the ECB is going all-out now," said Jacqui Douglas, senior global strategist at TD Securities.
"Looking at the rest of Europe we are expecting more easing from Sweden and Norway, that is where most central banks are leaning right now. There is no real rush to move ahead with rate hikes."
Markit's final PMI reading for the eurozone, published on Monday, was 51.0, in line with the flash estimate. Although at a six-month high, it was only just above the 50 mark that separates growth from contraction. In December the index came in at 50.6.
Worryingly for policymakers, firms cut prices in January at the steepest rate since mid-2013. Data on Friday showed annual inflation was a record-equalling low of -0.6% in January across the 19 nations using the euro.
In Britain, manufacturing grew slightly faster but factories cut prices at the fastest pace since 2009. The Bank of England will keep interest rates at a record low until at least October, later than previously thought, a Reuters poll found last week.
"With oil prices having stabilised at around $45 per barrel now, it seems likely that lower oil prices should continue to enable manufacturers to lower prices and so support demand," said Paul Hollingsworth at Capital Economics.
Still to come later on Monday is a sister manufacturing survey from Markit covering the United States, as well as the Institute for Supply Management's US factory index, which is forecast to have slipped to 54.5 in January from 55.1.
Easing China?
Earlier, a pair of surveys from China showed manufacturing struggling at the start of 2015 in the world's second biggest economy.
The Chinese HSBC/Markit PMI inched up a fraction to 49.7. But of more concern the official PMI, which is biased towards large factories, unexpectedly showed activity shrank for the first time in nearly two-and-a-half years.
The reading of 49.8 in January was down from December's 50.1 and missed a median forecast of 50.2. The report showed input costs sliding at their fastest rate since March 2009, with lower prices for oil and steel playing major roles.
Ordinarily, cheaper energy prices would be good for China, one of the world's most intensive energy consumers, but many economists believe the phenomenon is a net negative for Chinese firms because of its impact on demand.
The PMIs only fuelled bets on a weaker yuan and that more monetary easing was in store in Beijing too.
"China still needs decent growth to add 100 million new jobs this year, plus China is entering a rapid disinflation process," ANZ economists said in a note to clients.
"We (think) the People's Bank of China will cut the reserve requirement ratio by 50 basis points and cut the deposit rate by 25 basis points in the first quarter."
The downdraft has also spread into China's hitherto buoyant services sector, the lone bright spot in the economy last year. Service activity expanded at its lowest level in a year.
Slightly better news came from Japan, where the central bank has been pursuing an aggressive bond-buying campaign for over a year in a bid to revive growth and shake the country out of decades of deflation.
The final Markit/JMMA PMI edged up in January as the sustained weakness of the yen drove up exports. Improving exports were also a feature of South Korea's PMI which returned to growth for the first time in five months.
