Asia's factory pain eases as China's activity jumps
Asia’s factory pain continued to ease in July with contraction slowing in big export-reliant nations, adding to hopes the region is steadily emerging from the devastating hit of the coronavirus pandemic.
Manufacturing activity in China expanded at the fastest pace in nearly a decade as domestic demand improved, a private sector survey showed on Monday, suggesting the world’s second-largest economy will help cushion the pandemic’s blow to world growth.
But worries about a second wave of infections may weigh on global demand and business sentiment, keeping any rebound in Asia’s factory output feeble, some analysts say.
Japan, for one, will enjoy only a “very gradual and protracted recovery” as concerns about a resurgence in COVID-19 cases will weigh on domestic and overseas spending, said Stefan Angrick, senior economist at Oxford Economics.
China’s Caixin/Markit Manufacturing Purchasing Managers’ Index(PMI) rose to 52.8 last month from June’s 51.2, marking the sector’s third consecutive month of growth and the biggest jump since January 2011.
The upbeat findings echoed an official survey on Friday, adding to evidence the world’s second-largest economy is getting back on its feet faster than expected.
Japan and South Korea saw factory activity shrink at a much slower pace, a sign that pressures on manufacturers were easing and raising hopes the worst impact from the pandemic was over.
Taiwan’s manufacturing activity also rose above the 50-mark separating growth from contraction, suggesting that increased demand for work-from-home equipment is underpinning chip sales.
But factory activity in the Philippines and Vietnam slid in July, underscoring the patchy nature of the recovery.
India’s factory slump also deepened as renewed lockdown measures to contain surging virus cases weighed on demand and output.
Reference: Reuters
Read More: https://www.reuters.com/article/us-global-economy/asias-factory-pain-eases-as-chinas-activity-jumps-idUSKBN24Z09D
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