Asian factory activity expands in May on robust global demand
2024.06.02 23:23
By Leika Kihara
TOKYO (Reuters) – Asian factory activity expanded in May as manufacturers benefited from broadening global demand, private surveys showed on Monday, adding to hopes for sustained economic recovery in the region where China is showing early signs of rebound.
Manufacturing activity expanded in Japan for the first time in a year and in South Korea at the fastest pace in two years, due in part to hints of a pick-up in the automobile and semiconductor sectors, the surveys showed.
China’s private Caixin survey also showed factory activity rising at the fastest pace in about two years in May on strong production and new orders, offering hope of a broad-based recovery in Asia and other parts of the world.
The robust readings point to recovery in the manufacturing sector underpinning Asian growth and cushioning the blow from any market volatility caused by uncertainty over the U.S. monetary policy outlook.
Japan’s final au Jibun Bank manufacturing purchasing managers’ index (PMI) rose to 50.4 in May from 49.6 in April, having last climbed above the 50.0 threshold – which separates growth from contraction in activity – in May 2023.
South Korea’s PMI also rose to 51.6 in May, the highest reading since May 2022 and coming after two months below the 50 mark, showed a survey from S&P Global.
“South Korea’s manufacturing sector appears to have caught a second wind,” said Joe Hayes, principal economist at S&P Global Market Intelligence.
“Qualitative evidence from the survey also paints a promising forward-looking picture, with panelists commenting on imminent new product launches providing them with a platform for sustainable production expansion.”
Adding to the bright signs, China’s Caixin/S&P Global manufacturing PMI rose to 51.7 in May from 51.4 the previous month, the fastest pace since June 2022 and beating analysts’ forecasts of 51.5.
The reading contrasts with an official survey on Friday that surprised market participants by showing a fall in manufacturing activity, pointing to a mixed picture of the sprawling industry.
Manufacturing activity in May also expanded in Taiwan, Indonesia, Vietnam and the Philippines, private surveys showed.
