‘ASIAN EXPORTS BLIP ONLY TEMPORARY’

Findings from private surveys show Asian economies generally remain buoyant in Q2

FACTORIES across much of Asia ran into a soft patch last month as export demand slowed, but analysts said the weakness was likely to be temporary amid signs of steady improvement in the global economy.

The findings from private business surveys came a day after Moody’s Investors Service painted an upbeat picture of global growth.

The readings added to signs that Asian economies generally remained buoyant in the second quarter, with manufacturing activity continuing to improve — albeit at a more modest pace — and business confidence remaining strong overall.

Still, there were mixed readings on regional powerhouse China, with official data showing steady growth fuelled by an ongoing construction boom, but a private survey pointing to the first contraction in activity in 11 months.

After battling a multiyear trade recession, Asian exports have seen a strong rebound this year, often led by electronics. The tailwinds from Chinese commodities and tech products demand, however, appeared to fading.

Yet, Tim Condon, ING’s chief Asia economist, said the growth outlook for the region remained positive as strengthening economies in the United States, Japan and Germany would support shipments from the region.

“May figures are just a blip,” he said. “The hopes for cyclical recovery remains a positive theme, thanks to the strength of G3 economies.”

Data from Japan backed that assessment as manufacturing activity grew at its fastest pace in three months last month.

The world’s third-largest economy grew at its fastest pace in a year in the first quarter, marking the longest period of expansion in a decade.

An increase in capital expenditure in the first quarter also added to a raft of recent data pointing to economic expansion.

The Caixin/Markit Manufacturing Purchasing Managers’ index, which tends to focus on China’s smaller firms, fell below the 50-point demarcating growth and contraction to 49.6 last month.

That was less than economists’ forecast of 50.1 and extended a streak of declines to three months since 51.7 in February. Reuters