BusinessMirror

Asia’s factories remain in doldrums as lockdowns ease

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ASIA’S factory managers remained downbeat about the world’s trade engines in May, even as battered economies start to reopen across the region.

Purchasing managers indexes for South Korea, Japan and Taiwan fell, according to data released by IHS Markit on Monday. Readings for Vietnam, Malaysia, Thailand and the Philippine­s improved but remained below 50, the dividing line between contractio­n and expansion.

China PMI data released on Sunday showed the official manufactur­ing purchasing managers’ index declined to a worse-thanexpect­ed 50.6. There was better news on Monday in the Caixin PMI, an index more focused on smaller export-orientated firms, which rose to 50.7 from 49.4.

The factory data underscore the fragile and uneven recovery expected in Asia as prospects continue to weaken for countries in the northeast.

Northeast Asia “has had more success in containing the virus, which has led to quicker recovery in mobility and bodes well for domestic demand, but they still have to contend with a very weak external environmen­t and a potential downturn in the semiconduc­tor sector,” said Priyanka Kishore, head of India and Southeast Asia economics at Oxford Economics Ltd. in Singapore.

Many emerging economies showed signs of revival, even as their manufactur­ing sectors were still contractin­g. The process of re-opening will be challengin­g for economies in the region, especially now with the risk that rising Us-china tensions spill into economic policies, said Chang Shu, Bloomberg’s chief Asia economist.

High-frequency figures recently have shown an uptick in global demand, with risks that the recovery across economies will be uneven without a vaccine for the coronaviru­s.

Manufactur­ing gauges are signaling more relief so far than services sectors, with government­s only now beginning to ease lockdowns and allow for more mobility of consumers.

In South Korea, a bellwether for global trade, exports posted another double-digit decline in May. Overseas shipments fell 24 percent from a year earlier, the trade ministry said on Monday, compared with economists’ forecast of a 25 percent contractio­n.

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