(CTN NEWS) – TOKYO – According to polls released on Wednesday, Asia’s manufacturing activity decreased in January as the COVID reopening in China failed to fully offset the region’s economic recovery’s headwinds from the declining economies of the United States and Europe.
Initial signals of hope for Asia can also be found in easing input price pressures, with surveys revealing that the rate of output decline is moderating in Japan and South Korea.
However, other economists say there is doubt about Asia’s ability to withstand the blow of weakening global demand and persistently rising inflation.
According to Toru Nishihama, chief economist at the Dai-ichi Life Research Institute in Tokyo, “the worst of Asia’s downturn is behind.
But problems in important export destinations, including the United States and Europe, cloud the outlook.”
“Asian economies require a brand-new growth engine as COVID-19 recovery progresses. As of yet, none exist.”
Ticking up slightly to 49.2 in January from 49.0 in December.
A better-than-anticipated official PMI survey released on Tuesday was compared to the data.
The Caixin poll, however, is more focused on small enterprises and coastal regions than the official PMI, which mostly focuses on major, state-owned Chinese businesses.
Japan’s au Jibun Bank PMI remained unchanged from the previous month at 48.9 in January as the sluggish global demand hurt manufacturers.
However, the Japan PMI survey found that supplier delays were less frequent than at any point since February 2021 and that the inflation rate of input and product price inflation was the smallest in 16 months.
For the sixth consecutive month, industry activity in South Korea decreased in January. The reading was 48.5, up from 48.2 in December but still under the threshold of 50 points.
Although new orders in South Korea decreased for a seventh consecutive month in January, the poll found that the loss rate was a little slower than it had been the previous month.
Despite this, businesses continued to be optimistic about improving the global economy and increasing demand.
According to PMI surveys, factory activity increased in January in Indonesia and the Philippines but decreased in Malaysia and Taiwan.
India’s manufacturing sector got off to a slower start to the year, growing in January at the weakest rate in three months as both output and sales growth slowed.
The “surprisingly resilient” demand in the United States and Europe, as well as the reopening of the Chinese economy after Beijing dropped its rigorous economic controls.
On Tuesday, the International Monetary Fund modestly improved its global growth outlook for 2023.
However, the IMF predicted that global growth would still decline, from 3.4% in 2022 to 2.9% in 2023, and it cautioned that a global recession might happen quickly.
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