Manufacturing activity remained muted in Asia ahead of the peak holiday season, extending its protracted slump this year, data from S&P Global manufacturing purchasing managers’ indices (PMI) showed yesterday.
Japan’s PMI slowed slightly to 48.5 last month from 49.6 in August, falling even further from the 50 mark that separates expansion from contraction, according to a report published by S&P Global and au Jibun Bank.
Taiwan’s gauge posted a sizeable jump to 46.4 from 44.3, signaling a softer downturn last month. The global slump has hit the export-oriented economy hard, keeping its PMI deep in the red since May last year.
Photo: AFP
The manufacturing revival in Southeast Asia likewise lost steam with even the region’s best performer, Indonesia, seeing expansion slow to 52.3 from 53.9 the month before.
Factories in Vietnam saw activity shrink after a month of expansion, joining the likes of Thailand, Malaysia and Myanmar. Only the Philippines saw an improvement, flipping from contraction to expansion.
The latest data flashes warning signs as manufacturing settles into its peak season ahead of the Christmas and New Year holidays. It undercuts cautious optimism that the global economy is finding itself on steadier footing, with consumer demand and exports firming up in some quarters.
It promises to be a tricky path ahead for manufacturers as the onset of the El Nino dry spell and tighter oil supply threatens to revive cost pressures and keep borrowing costs higher for longer.
Eurozone manufacturing activity also remained mired in a deep and broad-based downturn last month, according to a survey which showed yesterday that demand kept shrinking at a pace rarely surpassed since the data was first collected in 1997.
The final eurozone manufacturing PMI, compiled by S&P Global, dipped to 43.4 from August’s 43.5, matching a preliminary estimate.
An index measuring output, which feeds into a composite PMI due on Wednesday and is seen as a good gauge of economic health, fell to 43.1 from 43.4.
“The output PMI was well under 50 for the entire third quarter, so we are feeling pretty certain that the recession in manufacturing continued during this period,” Hamburg Commercial Bank chief economist Cyrus de la Rubia said.
“In the race to the bottom, France and Germany are leading the way in the September PMIs. Meanwhile, Spain and Italy are pulling through somewhat less scathed,” he said.
The new orders index did rise last month, to 39.2 from August’s 39.0, but it remained firmly below the breakeven mark, S&P Global said.
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