* U.S. manufacturing returns to growth, exports still drag
* Manufacturing in euro zone and Asia wilts in Sept
* PMI data caps off dismal Q3 for world's factories
By Steven C. Johnson and Andy Bruce
NEW YORK/LONDON, Oct 1 (Reuters) - U.S. manufacturing grew slightly last month for the first time since May but euro zone factories suffered their worst quarter since early 2009, suggesting the region may struggle to avoid recession.
Factory activity in China also contracted, suggesting the world's No. 2 economy lost momentum for a seventh consecutive quarter.
The data showed companies across the world have yet to benefit much from the aggressive stimulus spending undertaken recently by the world's major central banks.
Even the U.S. data was considered only mildly encouraging. While a jump in new orders nudged the Institute for Supply Management's index of national factory activity up to 51.5 last month, ending three months of contraction, it remained well off levels seen in early 2012.
A separate index on U.S. manufacturing activity from financial information firm Markit came in at 51.1 in September and averaged 51.4 in the third quarter, both three-year lows. A reading above 50 indicates expansion.
Weaker overseas demand for U.S. products, the result of recession in many European countries and slower growth in Asia, was the main drag on U.S. factory activity, the data showed.
"We're still in a low-growth, fits-and-starts type of pattern here," said Tom Simons, money market economist at Jefferies & Co in New York. "And with Europe and China and other Asian economies slowing, it's going to be pretty difficult to accelerate exports."
A separate government report showed U.S. construction spending fell by the most in a year in August.
Chris Williamson, Markit chief economist, said U.S. manufacturing production and employment could be on the verge of contracting, "meaning that the sector is now likely to be acting as a drag on the wider economy,"
Markit's Eurozone Manufacturing Purchasing Managers' Index (PMI) rose to 46.1 from 45.1 in August, though September marked the 14th month of overall contraction in the sector.
And economists said all signs point to contraction in the euro zone's major economies for months to come.
"This is something that is going to persist into the fourth quarter," said Nick Matthews, euro area economist at Nomura.
"Even when you look at some of the forward-looking (PMI) indicators as a whole, they're still extremely weak for the area as a whole. The position still looks extremely vulnerable."
Unemployment in the euro zone stayed at a record high in August, as official data on Monday further highlighted the human cost of the bloc's three-year debt crisis.
The surveys did little to alter the view among economists that central banks in Europe will likely have to take more action to boost their flagging economies, although probably in November rather than this week.
In Britain, manufacturing shrank in September as export orders fell and costs soared, suggesting the Bank of England will extend asset purchases in November.
Graphic - Markit PMI: U.S., euro zone and China
Graphic - U.S. manufacturing: The Institute for Supply Management's gauge of U.S. manufacturing shows the sector expanded in September for the first time in three months.
Tepid demand in Europe continued to hurt Asian factory output as well. China's official manufacturing purchasing managers' index (PMI) stood at 49.8 last month, showing the sector contracted for a second straight month, though at a slower rate than in August.
That probably means China's economy suffered a seventh straight quarter of slowing growth, economists said.
"The data continues to reinforce the hard landing that we have predicted for China, because this is the second consecutive month of a sub-50 reading," said Prakash Sakpal of ING in Singapore, which forecasts China's economic growth will be close to 7 percent in both the third and fourth quarters of this year.
Two interest rate cuts, looser bank reserve requirements that cleared some 1.2 trillion yuan ($190 billion) for lending and more than $150 billion of infrastructure projects have as yet failed to arrest the decline in China's overall growth.
The global currents hurting China are being felt in its next largest rival Japan, where the quarterly Bank of Japan "tankan" survey of business sentiment reflected the central bank's view that growth will stall between now and March 2013.
Taiwan's PMI fell to its lowest in 10 months and South Korea reported a small year-on-year decline in exports.
"I don't see troubles stabilizing as yet. It will take a while longer until global demand shows signs of stabilization," said Saktiandi Supaat, foreign exchange research head at Maybank in Singapore.
(Editing by Clive McKeef)
Keywords: GLOBAL ECONOMY/