Employees work on the production line at Jingjin filter press factory in Dezhou, Shandong province, China, August 25, 2022. REUTERS/Siyi Liu/File Photo Acquire License Rights
- China’s private PMI unexpectedly picks up in August
- Treaty on factory activities between Japan and South Korea
- The rebound in China could be a sign that official efforts are bearing fruit
TOKYO, Sept 1 (Reuters) – Factory activity in Asia slowed in August as manufacturers felt pressure from rising production costs and slowing global demand, but an unexpected recovery in China gave some hope to the region’s export-dependent economies, as private surveys have shown.
China’s private Caixin/S&P Global Manufacturing Purchasing Managers’ Index (PMI) rose to 51.0 in August from 49.2 in July, a survey showed on Friday. It beat analysts’ forecasts and crossed the 50.0 line, which separates growth from contraction.
The reading came a day after an official survey showed that manufacturing activity had fallen for the fifth straight month, giving a mixed picture of business conditions in the world’s second largest economy.
While the rebound in Chinese factory activity could be a sign official efforts to revive growth are beginning to have an impact, factory activity stagnated in most of Asia in August.
Surveys showed that Japan’s factory activities fell for a third straight month in August, while South Korea extended its longest-ever slump on wage pressures and weak exports.
The data highlighted the challenge facing Asian policymakers in keeping inflation under control while cushioning the blow to their economies from sluggish global demand.
Asia is one of the few bright spots in the global economy, although continued weakness in China is clouding the outlook.
In its revised forecasts released in July, the International Monetary Fund predicted that economic growth in emerging Asia will accelerate to 5.3% this year, from 4.5% in 2022. He expects China’s economy to grow 5.2% this year, after a 3.0% increase in 2022.
“August PMI data signaled a sustained deterioration in operating conditions in South Korea’s manufacturing sector,” said Trevor Balchin, economic director at S&P Global Market Intelligence.
“The current declines in production and new jobs are the longest in the history of the survey, albeit much less severe than those registered during the pandemic and global financial crisis,” he said of factory activity in South Korea.
Japan’s final manufacturing PMI from au Jibun Bank came in at 49.6 in August, unchanged from July and stayed below the 50.0 threshold for the third straight month as input costs rose, a private survey showed.
South Korea’s PMI fell to 48.9 in August from 49.4 in July, marking the 14th straight month of decline on weak export orders.
Factory activity also fell in Taiwan, Malaysia and the Philippines last month, according to surveys, with Indonesia being the outlier with modest expansion.
Reporting by Leika Kihara. Edited by Shri Navaratnam
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