Asia factories in doldrums
Factory activity in Asia failed to speed up in May as the region's export-driven businesses struggled for new orders in a slow global economy, surveys released on Wednesday showed.
Output in China, the world's second largest economy, barely improved from a month earlier, while Japan, the third largest, contracted as production was still recovering from earthquakes that struck in April. "The picture is pretty muted in Asia, both in terms of exports and factory activity," said Su Sian Lim, Southeast Asia economist at HSBC in Singapore.
Though it was the third straight month of improvement, China's official Purchasing Managers Index (PMI) was only fractionally above positive at 50.1 in May. The survey also revealed new orders slowed and export orders stalled.
The private Caixin/ Markit Manufacturing Purchasing Managers' index, focusing on smaller companies, made even sorrier reading for global firms reliant on China's giant market for everything from consumer items, to cars and commodities. It showed conditions deteriorated for a 15th straight month.
China posted economic growth of 6.7 per cent in the first quarter - its slowest since 2009, and there are nagging doubts about the authorities' ability to engineer a turnaround without fueling debt.
Whereas speculation has hardened in recent weeks that the Federal Reserve will raise interest rates at a policy meeting on June 14-15, some Fed policymakers have said they remain concerned about uncertainties in China and a possible British exit from the European Union in a vote later this month.
"Globally growth is still slow, so while the Fed is keeping an eye on inflation in the US we don't believe policy makers will hike rates in June," Lim said.
An article in the People's Daily last month sparked speculation that Beijing is shifting to a more cautious policy stance. "Today's PMI figure rules out the possibility of imminent broad-based monetary policy easing" in China, ANZ economists said in a note to clients. In Japan, factories grappling to recover from the earthquakes in the southern manufacturing hub of Kumamoto were also knocked by a sharp contraction in external demand.
That showed up in the Markit/Nikkei Japan PMI, which fell to 47.7 in May on a seasonally adjusted basis - the fastest contraction in three years - from 48.2 in April.
Output in China, the world's second largest economy, barely improved from a month earlier, while Japan, the third largest, contracted as production was still recovering from earthquakes that struck in April. "The picture is pretty muted in Asia, both in terms of exports and factory activity," said Su Sian Lim, Southeast Asia economist at HSBC in Singapore.
Though it was the third straight month of improvement, China's official Purchasing Managers Index (PMI) was only fractionally above positive at 50.1 in May. The survey also revealed new orders slowed and export orders stalled.
The private Caixin/ Markit Manufacturing Purchasing Managers' index, focusing on smaller companies, made even sorrier reading for global firms reliant on China's giant market for everything from consumer items, to cars and commodities. It showed conditions deteriorated for a 15th straight month.
China posted economic growth of 6.7 per cent in the first quarter - its slowest since 2009, and there are nagging doubts about the authorities' ability to engineer a turnaround without fueling debt.
Whereas speculation has hardened in recent weeks that the Federal Reserve will raise interest rates at a policy meeting on June 14-15, some Fed policymakers have said they remain concerned about uncertainties in China and a possible British exit from the European Union in a vote later this month.
"Globally growth is still slow, so while the Fed is keeping an eye on inflation in the US we don't believe policy makers will hike rates in June," Lim said.
An article in the People's Daily last month sparked speculation that Beijing is shifting to a more cautious policy stance. "Today's PMI figure rules out the possibility of imminent broad-based monetary policy easing" in China, ANZ economists said in a note to clients. In Japan, factories grappling to recover from the earthquakes in the southern manufacturing hub of Kumamoto were also knocked by a sharp contraction in external demand.
That showed up in the Markit/Nikkei Japan PMI, which fell to 47.7 in May on a seasonally adjusted basis - the fastest contraction in three years - from 48.2 in April.
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