TOKYO (Reuters) – Factory activity in Asia weakened in March as weaker overseas demand hit production, sources said. The deterioration in the global outlook continues to weigh on the region’s recovery, suggesting it will keep policy makers on their toes.
Export-dependent Japan and South Korea both saw manufacturing activity contract in March, China’s growth stalled, and officials sought to curb inflation and fend off headwinds from weaker global economic momentum. In it, I highlighted the challenges facing Asia.
“We expect global growth to remain weak in the coming quarters and continue to weigh on manufacturing output in Asia,” said Sivan Tandon, Emerging Asia economist at Capital Economics.
China’s Caixin/S&P Global Manufacturing Purchasing Managers Index (PMI) was 50.0 in March, well below market expectations of 51.7 and below February’s 51.6.
A reading reflecting slower growth in the official PMI released on Friday put the index on the 50-point line separating growth and contraction.
Wang Zhe, senior economist at Caixin Insight Group, said of China’s PMI, “The foundations for the economic recovery are not yet solid. Future economic growth will depend on boosting domestic demand, especially improving household consumption. will do,” he said.
South Korea’s PMI fell to 47.6 in March from 48.5 in February, the fastest contraction in six months as weaker global demand hit export orders.
The final PMI for au Jibun Bank in March was 49.2, up from 47.7 in February, but remained below the 50 threshold, marking the ninth consecutive month of declining new orders.
A separate central bank survey released on Monday found sentiment among Japan’s largest manufacturers fell for more than two years from January to March as weak external demand added to the struggles of firms already grappling with rising raw material costs. deteriorated to the worst level.
India is a rare bright spot in the region, with improved production and new orders helping the manufacturing sector expand at its fastest pace in three months in March, helping the country’s economy weather the global slowdown. It suggests that it is better than other countries.
The study showed factory activity in Vietnam and Malaysia contracted in March, while the Philippines expanded at a slower pace than in February.
While the supply disruptions caused by the COVID-19 pandemic are largely on track, new signs of weak semiconductor demand and a global economic slowdown are emerging as risks to many Asian economies.
The collapses of two US banks and the Credit Suisse takeover last month have added uncertainty to the global outlook by causing market turmoil and highlighting potential vulnerabilities in the global financial system. rice field.
Although there are signs that the US Federal Reserve will soon pause its tightening cycle, the outlook remains uncertain amid troubled banking sectors, still-high inflation and a slowing global economy.
External pressures and uncertainties have left some of Asia’s major export-driven economies vulnerable. This is a time when companies are trying to bounce back after years of COVID-induced recession.
“We expect global growth and Asian export demand to remain weak in the coming quarters, given that much of the drag from rising interest rates has yet to permeate advanced economies,” said Tandon of Capital Economics. there is,” he said.
Reported by Reika Kihara Edited by Sri Navaratnam
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