The latest round of factory data adds to uncertainty as the global economy braces for a downturn, amid persistent inflation and high borrowing costs sapping already-fragile demand.
The divergence continued to widen in the region’s factories in February, with Southeast Asia’s more domestically-driven economies forging on ahead with their expansion and North Asia’s export-oriented hubs lagging, data from S&P Global manufacturing purchasing managers’ indexes showed Wednesday.
BloombergThailand posted a region’s best PMI reading of 54.8 last month as it ramped up manufacturing production and output. Vietnam’s gauge jumped sharply to 51.2 from 47.4 in January, crossing the 50-mark that separates expansion from contraction.
Philippines, Indonesia and Myanmar likewise posted positive PMI prints, which coincided with China’s manufacturing activity recording the highest monthly improvement in more than a decade.
“Improving demand conditions both domestically and internationally breathed new life into the Vietnamese manufacturing sector during February, snapping a three month soft patch around the turn of the year,” said Andrew Harker, Economics Director at S&P Global Market Intelligence.
The resurgence in activity in China in February came as factories reopened after the Lunar New Year holiday. The mainland’s PMI reading stood at 52.6 last month, beating the median estimate of 50.6 in a Bloomberg survey of economists.The non-manufacturing gauge — which measures activity in both the services and construction sectors — increased to 56.3 from 54.4, better than a projected improvement to 54.9.
Meanwhile, the contraction in North Asia’s factories persisted in February. The downturn sharpened in Japan, where PMI fell to 47.7 in February, its lowest in more than two years. South Korea will report its data on Thursday, but weak preliminary exports data suggest the nation’s woes continue.
Taiwan showed the sharpest improvement in the region, with its PMI jumping to 49 from 44.3, although it still remained in the red. Taiwan, a bellwether for global trade, reported softer drops in output and new orders, as well as improved supply chain pressures.
“The upwards movement in the indices reflected relative improvements in demand at some firms, partly due to the easing of Covid-19 restrictions in mainland China, and adds to hopes that the worst of the current downturn is now behind us,” said Annabel Fiddes, Economics Associate Director at S&P Global Market Intelligence.
“That said, there will need to be a meaningful pick up in global demand conditions to support a recovery,” she added.
