Asia’s factories did a better job in the past month than their European counterparts of weathering the supply chain effects of China’s lockdowns and the conflict in Ukraine.
South Korea’s purchasing managers’ index (PMI) climbed to 52.1 last month, recovering some ground lost in March, S&P Global said.
The Philippines, Myanmar and Australia all advanced as well, while only Taiwan proved an outlier.
By contrast, the equivalent measure in the eurozone was at a 15-month low.
“It will be important to see how growth momentum is sustained amid ongoing supply chain disruption and sharply rising costs,” S&P Global economist Maryam Baluch said.
China remains a significant risk as the latest surge in COVID-19 cases and subsequent lockdowns threaten to choke off manufacturing logistics and restrain trade.
In the eurozone, a measure of factory activity was revised up slightly to 55.5, but still confirmed to be slowing as shortages of components were aggravated by the Chinese outbreak and the war in Ukraine. Rising prices and uncertainty about the economic outlook also weighed on demand in the currency bloc, with growth in new orders slowing sharply.
The region’s manufacturing sector “looks set for a difficult period of falling production and surging prices,” S&P Global economist Chris Williamson said.
Asia-Pacific economies, which include some of the world’s top exporters, largely held up last month. Weaker activity in China — the top trading partner for much of the region — was offset by renewed demand in other key markets such as the US.
The Philippines recorded its best performance since November 2017, as output and new orders surged.
Taiwan fell — reflecting its deep economic links to China — with its lowest reading since July 2020.
In South Korea, price and supply pressures were exacerbated by Russia’s war on Ukraine and China’s expanding COVID-19 restrictions.
The fallout from China’s pandemic measures was evident in the nation’s manufacturing data, with a gauge of factory activity last month plunging to its lowest level in more than two years, data released over the weekend showed.
Last month’s PMI releases are scattered across several days because of holidays across the region, including Eid al-Fitr in Southeast Asia’s largest economy, Indonesia. Thailand’s PMI is set for release today, with Vietnam and Indonesia following tomorrow and Malaysia’s on Thursday.
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