Factory activity weakens across Asia in December
HONG KONG Factory activity weakened across Asia last month as the US-China trade war and a slowdown in Chinese demand hit production in most economies, strengthening the case for a pause in interest rate hikes in the region this year.
A series of purchasing managers' indexes (PMI) for last month released yesterday mostly showed declines or slowdowns in manufacturing factory activity across the region. In China, the Caixin/Markit PMI slipped into contraction territory for the first time in 19 months.
It went down to 49.7 from 50.2, its lowest reading since May 2017 according to figures released yesterday.
Any figure below 50 is considered a contraction.
China's weakness spilled over to other Asian economies.
Malaysia, which relies heavily on oil revenues, saw its weakest PMI reading ever at 46.8.
The contraction in South Korean manufacturing activity continued last month albeit at a slower pace, its PMI showed, with new export orders declining for a fifth consecutive month. Taiwan's PMI fell to 47.7 last month from 48.4 in November, down from 56.6 a year earlier.
Vietnam's PMI fell to 53.8 from November's 56.5, but the index's 2018 average was the highest since the survey's debut in 2011. Japan publishes PMI on Friday.
"We are really seeing a global slowdown into this year, and in Asia, particularly export-oriented countries are hurting," said Ms Irene Cheung, Asia strategist at ANZ.
"Our expectation for central banks is that most of them won't change policy in 2019 and these numbers coming out on the weak side won't change that outlook." - REUTERS