Manufacturing activity across Asia showed signs of improvement in January, but the pace remained sluggish as turmoil in Europe and the United States hurt demand for exports. Asian factories have been hit hard by weakness in developed economies as consumers slash their spending due to rising unemployment and an increasingly grim outlook for the global economy.
In China, the world's second-largest economy and number one exporter, manufacturing expanded for the second straight month while India recorded the fastest growth in eight months, separate purchasing manager surveys showed.
China's official purchasing managers index (PMI) rose to 50.5 in January from 50.3 in December, after contracting for the first time in 33 months in November, when the PMI stood at 49.
Indian manufacturing showed the strongest growth in the region, with the HSBC India Manufacturing Purchasing Managers' Index (PMI) rising to 57.5 in January from December's 54.2 -- the highest level in eight months.
Activity continued to contract in Taiwan and South Korea last month, though less severely than in December. HSBC's PMI for Taiwan reached 48.9 compared with 47.1. In South Korea, PMI rose to 49.2 in January from 46.4 in December.
Manufacturing expanded slightly in Australia, rising 1.4 points to 51.6 in January, according to Australian Industry Group-PricewaterhouseCoopers.
A separate PMI measure for China by HSBC departed from the official reading. HSBC said its final reading of China's PMI for January was 48.8, nearly unchanged from 48.7 in December, as China's manufacturing activity contracted for the third straight month.
"China's process of economic contraction is gradually stabilizing," said Zhang Liqun, a researcher at government think-tank, the Development Research Center.
Export-driven China saw its economy grow 9.2% last year, well down from 10.4% growth in 2010, and most forecasts put this year's expansion at between 8% and 8.5%. But Zhang warned that slowing export growth could spell trouble for China's economy later this year -- and given its size would have a negative impact on the rest of the region.
New export orders fell to 46.9 in January, down from 48.6 last month, according to the latest data released on Feb. 1. "Changes in external factors may impact the economy, requiring close attention," Zhang said.
Still, analysts said the latest reading showed China's economy was headed for a "soft landing."
"The manufacturing sector has stabilized somewhat due to supportive fiscal and monetary policies," ANZ Research said in a report. "The stronger-than-expected PMI supports our baseline scenario of a soft landing."
Copyright Agence France-Presse, 2012