An employee works on a production line for producing steel structures at a factory in Huzhou, Zhejiang province, China, May 17, 2020. Picture taken May 17, 2020. China Daily via Portal/File Photo Rights Acquire
- China’s private PMI unexpectedly rises in November
- Manufacturing activity is declining in Japan and stabilizing in South Korea
- Weak global demand is clouding the prospects for Asia’s fragile recovery
TOKYO, Dec 1 (Portal) – Asia’s factory activity remained weak in November due to weak global demand, surveys showed on Friday, with mixed signs on the strength of China’s economy clouding prospects for the region’s fragile recovery.
China’s Caixin/S&P Global Manufacturing private purchasing managers’ index (PMI) unexpectedly rose to 50.7 in November from 49.5 in October.
The reading came a day after an official survey showed a decline in both manufacturing and non-manufacturing activity, underscoring worsening problems in the world’s second-largest economy.
“The domestic market cannot compensate for the losses in Europe and the United States. “The data shows that factories are producing less and hiring fewer people,” Dan Wang, chief economist at Hang Seng Bank China, said of China’s PMI readings, which vary across samples.
Surveys showed that export-dependent Japan, South Korea and Taiwan bore the brunt of sluggish global demand, with manufacturing activity stagnating in November.
“An early recovery in Asia is unlikely,” said Toru Nishihama, chief emerging market economist at Dai-ichi Life Research Institute. “While exports have likely bottomed out, they will not accelerate much from here as the global economy lacks a key growth engine.”
Japan’s final manufacturing purchasing managers’ index from Jibun Bank fell to 48.3 in November from 48.7 in October, shrinking at its fastest pace in nine months.
South Korea’s PMI was 50.0 in November, up slightly from October’s reading of 49.8. The recovery in the factory reading came after 16 consecutive months of declines through October, the longest decline since the survey began in April 2004.
Manufacturing activity also contracted in Taiwan, Vietnam and Malaysia, while it increased in India, Indonesia and the Philippines, the surveys showed.
China’s economy has struggled to mount a strong recovery from the pandemic this year, making the already cloudy global outlook even bleaker as economies in the U.S. and Europe begin to feel the pressure of previous aggressive interest rate hikes.
“The weakness in China’s services sector is particularly worrying as it shows that demand is weakening despite increasing supply,” said Nishihama of the Dai-ichi Life Research Institute.
In India, the PMI survey released on Friday showed the country’s manufacturing growth accelerated in November due to robust production and new orders.
While domestic demand appeared strong, international demand suffered a slump and new export orders were at a five-month low.
Reporting by Leika Kihara; Editing by Jamie Freed
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Originally posted 2023-12-01 06:28:22.