Asia Manufacturing Powers Ahead, Even as China PMI Cools

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Asia’s manufacturing activity remained robust through April even as a gauge of factory output in China, the region’s top economy and industrial powerhouse, showed signs of cooling.

Taiwan’s IHS Markit April manufacturing purchasing managers’ index rose to 62.4 from 60.8 in March, its highest reading since March 2010. New orders also reached their highest level since the same month.

South Korea’s IHS Markit PMI index for April slipped to 54.6 from 55.3 but remains well above the 50 level, signaling ongoing expansion. It was the seventh straight month of expansion for the South Korean gauge, a first in almost a decade.

Asia Manufacturing Powers Ahead, Even as China PMI Cools

Data on Saturday showed South Korean exports last month rose the most in 10 years, reflecting a recovery from the effects of the pandemic and boosted by an increase in the number of working days from a year earlier.

Global trade has kept up its pandemic-era winning streak, with Asian economies especially benefiting from the boom in goods orders, the Bloomberg Trade Tracker shows. Shipments from South Korea and Taiwan have surged, buoyed by demand for electronics.

Supply crunches worldwide are resulting in a backup at some of the busiest ports, with inbound containers at the Port of Los Angeles notching a monthly gain in March that was more than eight standard deviations above its long-run average.

Annabel Fiddes, economics associate director at IHS Markit, said supply-side crunches are beginning to dent Taiwan’s manufacturing boom as supplier delays hit a record.

“This is starting to weigh on overall production growth, while firms also registered a rapid increase in backlogs,” Fiddes said in a release. “Supply bottlenecks could weigh on performance in the months ahead, despite manufacturers’ efforts to build buffer stocks.”

Southeast Asia, India

India’s index inched up to 55.5 last month from 55.4 in March, even as a fresh wave of coronavirus infections began to weigh on output and sales.

There also wasrobust growth in Southeast Asia. Indonesia’s PMI reading rose to 54.6 from 53.2, its highest since the series began and its sixth consecutive month of expansion. A subindex for new orders also ticked up.

Malaysia’s PMI rose to 53.9 from 49.9, also its highest reading since the series began. New orders rose and output jumped to 53.3 from 46.2 in March, its best level since last June. The Philippines PMI fell to 49 from 52.2 -- its lowest reading since October -- reflecting ongoing restrictions to curb Covid-19.

The overall upbeat figures follow separate data released Friday that showed China’s manufacturing expansion cooled in April. The official manufacturing purchasing managers’ index fell to 51.1 from 51.9 in the previous month.

©2021 Bloomberg L.P.

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