Weaker United States, mainland PMI a cause for concern
The latest manufacturing data from mainland China and the United States should be a cause for concern, especially for countries where trade remains a vital support for the economy.
Among ASEAN economies, not only Malaysia, but Singapore, Thailand and Indonesia have been affected by the global headwinds.
A Chinese slowdown would impact Malaysia and Singapore, with their vital links via the manufacturing supply chain and goods trade.
The Caixin purchasing managers’ index (PMI) for August, released on Friday, has contracted for six straight months and has fallen to the lowest in more than six years.
The Caixin PMI, a gauge of Chinese factory activity, covers medium-sized manufacturers.
The PMI covers factors such as inventory, new orders and production.
From the PMI, analysts can gauge not only economic growth but also exports.
The official manufacturing PMI, due at the end of the month, slipped to the borderline 50 in July, from 50.2 in June.
Mainland China’s official PMI covers the larger manufacturers. A reading above 50 on the index indicates growth, while a reading below that indicates a decline in activities.
Meanwhile, the PMI data from Europe shows that manufacturing activity continue to expand although afer several years of turbulence.