China’s manufacturing expanded at a faster pace last month and a gauge for India showed sustained growth, indicating that Asian economies are maintaining momentum even as the eurozone debt crisis caps exports.
In China, the purchasing managers’ index (PMI) rose for a third month to 51 last month from 50.5 in January, the Chinese National Bureau of Statistics and China Federation of Logistics and Purchasing said in a statement yesterday.
In India, a purchasing managers’ index released by HSBC Holdings PLC and Markit -Economics was close to an eight-month high.
The PMI data, along with a surprise gain in Japanese companies’ capital spending and South Korea’s biggest increase in exports in six months, add to signs that global growth prospects are improving as the US recovery strengthens and Europe works to contain its debt crisis.
“Pent-up demand will produce an export-led bounce in Asian economic activity” now that Europe’s debt turmoil is receding, said Tim Condon, chief Asia economist at ING Financial Markets in Singapore.
In China, the PMI’s level, above the expansion-contraction dividing line of 50, was the highest since September last year and compared with the 50.9 median estimate in a Bloomberg News survey. Economic data for the first two months are distorted by the weeklong Chinese New Year holiday.
A separate manufacturing index released yesterday by HSBC Holdings PLC and Markit Economics showed that China’s PMI rose to 49.6 last month from 48.8 the previous month, the third straight improvement and the highest since October. The Indian gauge was at 56.6 last month from 57.5 in January, HSBC and Markit said.
Meanwhile, capital spending by Japanese companies jumped by the most in almost five years in the fourth quarter of last year, the Japanese Ministry of Finance said yesterday in Tokyo.
Capital spending excluding software rose 4.9 percent from a year earlier, after declining 11 percent in the previous quarter, the ministry said. A weakening yen, gains in industrial production and retail sales, and increased government spending on reconstruction from last year’s earthquake and tsunami could drive an expansion this quarter.
“Reconstruction demand was probably the biggest support for the increase in capital spending,” said Akiyoshi Takumori, chief economist at Sumitomo Mitsui -Asset Management Co. “The -upward trend in business investment is likely to continue as companies become more optimistic as rebuilding demand materializes more and the yen weakens.”
In Seoul, a sharp rebound in exports pushed South Korea’s trade balance back into the black last month following a rare deficit in the previous month, a government report said yesterday.
The nation posted a US$2.2 billion trade surplus last month, a reversal from a revised US$2.03 billion deficit in the previous month, according to provisional data from the South Korean Ministry of Knowledge Economy.
Exports rose 22.7 percent year-on-year to US$47.2 billion last month, led by brisk overseas sales of ships and cars. Imports grew 23.6 percent year-on-year to US$45 billion, leaving a US$2.2 billion trade surplus for the month. South Korea’s trade deficit in January was its first for two years, caused by falling demand in key export markets.
“The trade balance is now back in the black. Daily average export volume has increased in February to ease concerns over weakening exports,” the ministry said in a statement.
Australia was an exception yesterday to positive economic data in the Asia Pacific region. Business investment unexpectedly fell in the three months through December, while Australian home-building approvals rose by less than economists forecast in January.
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