Asia’s manufacturing-sector expansion held around multi-month highs in November, factory surveys showed, with China maintaining its momentum but growth in other key exporters such as Japan, South Korea and Taiwan picking up speed.
Activity in India expanded after three months of contraction as new orders grew for the first time since May, supporting government figures on Friday that suggested an economic slump may have bottomed out.
Purchasing managers’ indexes released on Monday showed the factory sector in Taiwan grew at its fastest pace in 20 months in November and at its fastest in six months in South Korea.
Japan’s PMI, released on Friday, showed manufacturing activity expanding at its quickest pace in more than seven years as new export orders reached their highest level in over three years.
The Asia data suggests the global economy is showing signs of a more solid recovery as 2013 draws to a close. PMI reports from the euro zone and the United States later on Monday are expected to show both regions maintained factory-sector growth in November.
The HSBC/Markit China PMI on Monday edged back to 50.8 in November from a seven-month high of 50.9 in October, although HSBC economist Qu Hongbin said the survey also pointed to spots of weakness.
“The renewed contraction of employment and the slower pace of restocking activities call for a continuation of accommodative policy,” he said.
However, China’s official PMI released at the weekend, which focuses more on bigger firms compared with smaller ones in the HSBC survey, held at 51.4 in November, unchanged from the 18-month high hit in October.
A reading of 50 separates contraction from expansion compared with a month earlier.
While the HSBC survey showed China’s new export orders growth dipped to a three-month low, the official reading showed the pace picking up.
Still, the combination of PMIs on China suggested resilience that augurs well for the country’s plans to gear the economy more towards domestic consumption and away from investment-led growth. Beijing has said it will accept lower economic growth to achieve the shift.
Japan’s strong reading showed domestic demand and exports are recovering strongly from a dip in the middle of the year, which means the economy could be building up enough momentum to weather an increase in the sales tax rate in April, which could dampen domestic consumption.
The Markit/JMMA Japan Manufacturing Purchasing Managers Index (PMI) rose to a seasonally adjusted 55.1 in November from 54.2 in October, its highest level since July 2006.
Prime Minister Shinzo Abe has overseen massive monetary and fiscal stimulus this year to revive the economy, which has now grown in the past four quarters.
The HSBC/Markit PMI of South Korea’s manufacturing sector rose to a seasonally adjusted 50.4 in November from 50.2 in October, marking the highest reading since May.
Taiwan’s PMI showed manufacturing activity expanding for a third straight month as the overall index, and sub-indexes for output and new orders hit their highest levels in 20 months.
REUTERS
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