Factory activity across Asia -- including Thailand -- continues to gain momentum, spurred by strong demand for the region’s exports, purchasing managers’ indexes show.
Japan’s PMI rose to 50 in December, its highest reading since April 2019, according to Jibun Bank and IHS Markit. Taiwan’s PMI jumped to 59.4, its highest mark in a decade, while South Korea’s remained at 52.9, its third consecutive month above the 50 level that separates contraction from expansion.
The figures come after China’s official PMI showed a moderation in the pace of industrial growth last month, which could have a cooling effect on the rest of the region in coming months. The gauge of China’s manufacturing fell to 51.9 from a three-year high of 52.1 in November, the National Bureau of Statistics said Dec 31.
Southeast Asia’s economies showed mostly marginal improvement last month, with Indonesia advancing further into expansion at 51.3 from 50.6. Thailand’s PMI gained and Vietnam lurched back into expansion, while the Philippines slipped slightly and is still in contraction territory. Malaysia’s index rose in December but remained below 50.
The data are in line with the Bloomberg Trade Tracker, which showed robust healing from the pandemic in the second half of 2020, especially among Asian economies. Eight of the 10 gauges on the tracker are at or above their long-run normal ranges.
“Purchasing managers’ indexes for December show Asia’s manufacturing sector persevering even as the coronavirus pandemic worsened... The coming months will remain challenging as surges of infections in the region and beyond undermine demand,” said Chang Shu, Bloomberg’s chief Asia economist.
As a bellwether for global trade, South Korea’s PMI reading is often held up as a gauge for future demand. Firms reported further increases in both output and new orders in the latest survey period, according to Usamah Bhatti, an economist at IHS Markit.
“South Korean goods producers remained optimistic in their outlook for activity over the coming 12 months, as the pandemic fades further and new products are launched,” Bhatti wrote in a release.