Asia’s manufacturing industry finished last year with a modestly brighter outlook, with fewer economies signaling contraction at factories.
Purchasing managers’ indices (PMIs) for Taiwan, South Korea and Thailand last month all moved above 50, data from IHS Markit showed yesterday. Malaysia improved right to 50, the dividing line between expansion and contraction, while Indonesia stayed slightly below it.
“PMIs seem to have improved across the board in December and sentiment is likely to improve further following the positive developments on the trade front,” Singapore-based Oxford Economics India and Southeast Asia economics head Priyanka Kishore said.
The regional readings come as China’s manufacturing sector last month continued to expand output, bolstering views that the world’s second-largest economy is stabilizing.
China’s official manufacturing PMI remained at 50.2 and the sub-index of new orders for export rose into expansion for the first time since May 2018.
The Caixin Media and IHS Markit PMI showed that China’s manufacturing index edged down to 51.5 last month from 51.8 in November.
“Last year was so bad. We are going to have a cyclical recovery,” said Xia Le (夏樂), Hong Kong-based chief Asia economist at Banco Bilbao Vizcaya Argentaria SA. “We can expect a cyclical recovery led by the exports sector and the manufacturing sector in the region.”
South Korea’s manufacturers — often viewed as a key barometer of global demand — enjoyed the strongest performance since April, with both output and new orders pushing into positive territory for the first time since October 2018.
India’s manufacturing PMI rose to 52.7 last month from 51.2 in November, backing a view that a nascent recovery in the economy was gathering steam. The pickup in activity was boosted by new orders, which grew at the fastest pace since July.
Global manufacturing has recovered somewhat from a slump in the middle of last year, as the impact of higher tariffs waned and as signs of a nascent rebound in the electronics sector emerged, which is especially critical to Asia’s export engines.
US President Donald Trump said that he would sign the first phase of a trade deal with China on Jan. 15, sealing an agreement that sees the Asian nation raising purchases of US farm goods in exchange for lower tariffs on some of its products.
“Survey data showed that businesses anticipate 2020 to be more positive, as signaled by higher input purchasing and stockpiling,” IHS Markit economist Joe Hayes said in a release. “Key to the reversal of the negative trend seen through most of 2019 seems to be new product launches, particularly in the automotive and electronic sectors.”
Three experts in the high technology industry have said that US President Donald Trump’s pledge to impose higher tariffs on Taiwanese semiconductors is part of an effort to force Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) to the negotiating table. In a speech to Republicans on Jan. 27, Trump said he intends to impose tariffs on Taiwan to bring chip production to the US. “The incentive is going to be they’re not going to want to pay a 25, 50 or even a 100 percent tax,” he said. Darson Chiu (邱達生), an economics professor at Taichung-based Tunghai University and director-general of
Hon Hai Precision Industry Co (鴻海精密) is reportedly making another pass at Nissan Motor Co, as the Japanese automaker's tie-up with Honda Motor Co falls apart. Nissan shares rose as much as 6 percent after Taiwan’s Central News Agency reported that Hon Hai chairman Young Liu (劉揚偉) instructed former Nissan executive Jun Seki to connect with French carmaker Renault SA, which holds about 36 percent of Nissan’s stock. Hon Hai, the Taiwanese iPhone-maker also known as Foxconn Technology Group (富士康科技集團), was exploring an investment or buyout of Nissan last year, but backed off in December after the Japanese carmaker penned a deal
WASHINGTON POLICY: Tariffs of 10 percent or more and other new costs are tipped to hit shipments of small parcels, cutting export growth by 1.3 percentage points The decision by US President Donald Trump to ban Chinese companies from using a US tariff loophole would hit tens of billions of dollars of trade and reduce China’s economic growth this year, according to new estimates by economists at Nomura Holdings Inc. According to Nomura’s estimates, last year companies such as Shein (希音) and PDD Holdings Inc’s (拼多多控股) Temu shipped US$46 billion of small parcels to the US to take advantage of the rule that allows items with a declared value under US$800 to enter the US tariff-free. Tariffs of 10 percent or more and other new costs would slash such
SENSOR BUSINESS: The Taiwanese company said that a public tender offer would begin on May 7 through its wholly owned subsidiary Yageo Electronics Japan Yageo Corp (國巨), one of the world’s top three suppliers of passive components, yesterday said it is to launch a tender offer to fully acquire Japan’s Shibaura Electronics Co for up to ￥65.57 billion (US$429.37 million), with an aim to expand its sensor business. The tender offer would be a crucial step for the company to expand its sensor business, Yageo said. Shibaura Electronics is the world’s largest supplier of thermistors, with a market share of 13 percent, research conducted in 2022 by the Japanese firm showed. If a deal goes ahead, it would be the second acquisition of a sensor business since
RSS