Japan and South Korea saw manufacturing activities drop, as well as Taiwan, Malaysia and Vietnam in a sign of the fragile state of the region’s economies
Factory activity in many Asia economies weakened in March despite a bounce back in China as lacklustre domestic demand dragged on growth, surveys showed on Monday, clouding the outlook for a key driver of the global economy.
Export powerhouses Japan and South Korea saw manufacturing activities drop, as well as Taiwan, Malaysia and Vietnam in a sign of the fragile state of the region’s economies.
China’s Caixin/S&P Global manufacturing PMI gained 51.1 in March from 50.9 the previous month, a private survey showed on Monday, expanding at the fastest pace in 13 months with business confidence reaching an 11-month high.
The finding joins an official PMI survey released on Sunday that showed China’s factory activity increased for the first time in six months.
The bounce back in China, which is struggling to mount a strong economic revival partly because of a drawn out property crisis, provides some welcome relief to Beijing and investors globally.
China’s exports are picking up a bit but that is because their goods are cheap. That means other Asian countries must compete with China for demand that is not growing, according to Toru Nishihama, chief emerging market economist at Dai-ichi Life Research Institute.
With no clear driver of global growth, it is hard to paint a rosy outlook for Asia, Nishihama said.
Japan’s final au Jibun Bank PMI stood at 48.2 in March, highest since November and recovering from February’s 47.2 which marked the fastest pace of contraction in more than 3-1/2 years.
But activity dropped for a 10th consecutive month as new export orders plunged, reflecting souring sentiment in key markets such as China and North America, according to the survey.
South Korea’s manufacturing activity also dropped in March as slowing domestic demand offset strong overseas sales with the PMI dropping to 49.8 in March from 50.7 in February.
Taiwan’s PMI dropped to 49.3 in March from 48.6 in February, while that for Vietnam declined to 49.9 from 50.4, and Malaysia’s dropped to 48.4 from 49.5, according to the surveys.
By contrast, manufacturing activity expanded in March in the Philippines and Indonesia, the surveys showed.
