Tokyo, June 1 (BNA): Factory activity in Asia slowed in May amid problems for some of the region’s economies, which are under pressure from rising raw material costs.
Business surveys on Wednesday showed manufacturers’ activity slowed last month in countries ranging from Japan to Taiwan and Malaysia, in a sign of the challenge policymakers face in fighting inflation with tighter monetary policy — without hampering growth.
A special survey showed that China’s Caixin/Market manufacturing PMI came to 48.1 in May, a slight improvement from 46.0 the previous month, but remained below the 50-point threshold that separates contraction from expansion.
The result was in line with official data released on Tuesday which showed factory activity in China declined at a slower pace in May.
“Rising inflation is forcing some Asian central banks to tighten monetary policy. There is also a risk of market volatility from higher US interest rates. Given these layers of risk, Asia’s economy may remain weak for most of this year.”
Manufacturing activity in Japan grew at the weakest pace in three months in May, and manufacturers reported a renewed rise in input costs, a PMI survey showed, as the fallout from lockdowns in China and the conflict in Ukraine weighed on the economy.
Japan’s latest Gibbon Bank PMI fell to a seasonally adjusted 53.3 in May from 53.5 the previous month, the slowest pace since February.
“Both production and new orders rose at lower rates, with the latter rising at the weakest pace in eight months amid ongoing supply chain disruption and higher raw material prices,” said Osama Bhatti, economist at Standard & Poor’s Global Market Intelligence.
PMI surveys showed factory activity in the Philippines also slowed to 54.1 in May from 54.3 in April, while activity in Malaysia fell to 50.1 from 51.6 in April. Taiwan’s manufacturing activity stabilized at 50.0 in May, down from 51.7 from April.
In a glimmer of hope, South Korea’s exports grew faster in May than in the previous month, data showed on Wednesday, with shipments increasing to Europe and the United States.
South Korea’s monthly trade data, the first to be released among major exporting economies, is a leader in global trade.
Factory activity in India expanded at a better-than-expected pace in May, with demand resilient despite persistently high inflation.