BENGALURUTOKYO, June 3 Reuters Global factory activity offered signs of recovery last month as contraction slowed in the euro zone and manufacturing activity in most of Asia39;s largest economies picked up, private business surveys showed on Monday.

Improved overall business sentiment suggests more solid momentum in the global economy, defying slowdown expectations prevalent earlier this year, and offering a reason for central banks to hold off cutting interest rates or to proceed cautiously when they do.

While a more solid expansion in Asia took hold, the surveys also showed signs that euro zone39;s manufacturing sector may have turned a corner last month after a long downturn. Activity in Germany and France, the bloc39;s two biggest economies, showed signs of bottoming out.

HCOB39;s final euro zone manufacturing Purchasing Managers39; Index PMI, compiled by SP Global, rose to 47.3 in May from 45.7. It held below the 50 point mark that separates expansion from contraction for a 23rd month and came in just shy of a 47.4 preliminary estimate.

It39;s positive confirmation we39;ve seen the bottoming out of the cycle … it points to probably a slight acceleration of growth, said Carsten Brzeski, global head of macroeconomics at ING, about the euro zone surveys.

Other global PMIs were also positive and encouraging, he said. I think it is also reflecting China is doing better than anticipated and reflecting the U.S. resilience to some extent.

Falling production costs…