Analysis of September manufacturing trends in Asia

manufacturing trends in Asia

Asia’s manufacturing economy became better in September as manufacturers continued to produce as the Corona virus decreased, but weak foreign demand could still affect the region’s export-oriented economies. In this article of  ICIS analysis of September manufacturing trends in Asia is described.

Asia’s manufacturing bellwether China reported that its official Purchasing Managers’ Index (PMI) rose stronger than expected Increased by 0.5 in September compared to August, largely based on its sub-indices.

Japan’s Nomura Global Markets Research said in a note: Sub-indices of production and raw materials rose from 53.5 and 47.3 in August to 54.0 and 48.5 in September, respectively.

China’s new sub-index of export orders rose to 50.8 in September from 49.1 in August, supporting a positive outlook for China’s export sector.

Separately, Caixin’s manufacturing PMI, which tracks most SMEs and export-oriented firms in the eastern coastal regions, remained at 53.0 in September, despite adjusting from 53.1 in August.

As Nomura said: “Because of the uncertainty in relationship between the United States and China, caused by the Covid-19, we expect China’s official manufacturing PMI to remain around 51.0 in the short term, while the official non-manufacturing PMI may be a little softer.”

“Beijing is likely to continue its wait-and-see approach until the end of this year with no further reduction or tightening,” it said.

Wang Zhe, chief economist at China’s Caixin Insight Group, said the power of the manufacturing sector would remove some of the pressures on policymakers.

September data in Japan, showed that Japan’s manufacturing sector has taken another step towards stabilization, while au Jibun’s PMI rose to 47.7 from 47.3 in August.

According to this bank, new orders have fallen to their lowest level since January, showing a reversal of a sharp downturn in the early stages of the pandemic.

In South Korea, production conditions improved significantly in September, with IHS Markit manufacturing PMI rising to its highest reading since January at 49.8 from 48.5 in August.

In India, the manufacturing industry improved further amid reports of declining coronavirus restrictions and higher demand.

IHS Markit India for PMI in September reached its highest level in the last eight and a half years with 56.8, compared to 52.0 in August!

IHS Markit said that India’s exports returned in September after six consecutive months of contraction, with producers increasing their purchasing activity in line with higher production needs.

In Southeast Asia, production conditions remained challenging amid tight lockdown measures that led to a further drop in factory output and a further drop in total new orders.

The manufacturing PMIs for Indonesia, Thailand, Malaysia and Singapore were all under 50 in September. You can see the manufacturing trends in Asia in September in the picture below:

Asia manufacturing PMIs

Asia manufacturing PMIs

Article Number: 247
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