In its new report on manufacturing in Asia, the Manufacturers Alliance for Productivity and Innovation (MAPI) notes that although recent indicators for Asian economies have been mixed, overall growth is stabilizing.
The report, "Asian Manufacturing Outlook" studied three main areas: Japan, South Korea and a group identified as “Developing Asia” comprised of China, India, Indonesia, Malaysia and Thailand.
Looking at Japan, predictions are for a modest acceleration of GDP growth from 1.9% in 2013 to 2.1% in 2014. This is due to the positive impact from wide-ranging stimulus programs in one of the most rapidly aging major economies, according to the study.
Japan’s manufacturing output is anticipated to contract by 0.5% in 2013 before accelerating by 4.3% in 2014.
The less developed South Korean economy, with its markedly younger labor force, is expected to experience a stronger acceleration of GDP growth, from 2.7% in 2013 to 3.5% in 2014.
Manufacturing production will gain momentum as well when both domestic and external demand pick up strength. South Korean industrial production growth is expected to be just 1% during 2013 before rising to 4% in 2014.
Even slower growth is expected in China as the country “confronts a sluggish world economy, increasingly difficult demographic challenges impacting labor supply, and the need to rebalance the sources of growth from exports and fixed asset investment to domestic private consumption.”
Activity in the economies of the other countries in Developing Asia reflect the mixed global and Chinese pictures, with the exception of India, whose structural difficulties “are bubbling to the surface and giving rise to an unusually weak picture and significant diminishment of international investor confidence,” according to the report’s co-authors senior economist Cliff Waldman and economist Yingying Xu.
GDP growth in Developing Asia is predicted to accelerate modestly from 6.3% in 2013 to 6.5% in 2014, slower in both years than the 6.9% growth in 2012. This grouping’s industrial production growth is anticipated to advance from 7.8% in 2013 to 8.1%in 2014.