Euro zone factory activity remained in decline in November, but there were some signs of improvement, according to the latest data. The manufacturing Purchasing Managers’ Index (PMI) for the Euro zone came in at 45.3, slightly higher than the previous month’s reading of 44.4. While the sector continued to contract, the pace of decline was slower, indicating a potential turnaround. However, this improvement was overshadowed by concerns over weak global demand.
China, on the other hand, presented a contrasting picture. The country’s private PMI unexpectedly expanded in November, defying expectations. The Caixin/Markit PMI came in at 51.8, showing a strong rebound from the previous month’s reading of 50.9. This was in contrast to China’s official PMI, which remained in contraction territory. The unexpected expansion in the private PMI signals a potential recovery in China’s manufacturing sector, providing a ray of hope for the global economy.
However, Japan and South Korea faced stagnation in their manufacturing sectors. Both countries recorded weak PMI readings, reflecting the impact of weak global demand. Japan’s manufacturing PMI was at 48.9, slightly higher than the previous month’s reading, but still below the 50-point mark that separates expansion from contraction. South Korea’s PMI remained unchanged at 48.4, indicating the continued struggle of its manufacturers.
The outlook for Asia’s recovery remained uncertain, largely due to soft demand. As major economies struggle to regain their footing, there are concerns over the region’s ability to bounce back. Central banks in many countries have shifted their focus from raising interest rates to supporting their economies, as global manufacturing activity continues to be impacted by the ongoing pandemic and aggressive interest rate hikes in the past.
The weakness in China’s service sector is also a cause for concern. The country’s service sector PMI came in at 52.5, slightly lower than expected, raising worries about evaporating demand. As China is a major consumer and contributor to the global economy, any weakness in its service sector could have ripple effects worldwide.
On a positive note, India’s manufacturing growth accelerated in November. The country’s PMI rose to 56.3, indicating expansion and a strong recovery. However, new export orders declined, raising concerns about the sustainability of India’s manufacturing growth in the face of weak global demand.
In conclusion, the global manufacturing sector continues to face challenges due to the ongoing pandemic and weak global demand. While there are signs of improvement in some regions, the overall outlook remains uncertain. Central banks are shifting their focus to support their economies, reflecting the need for monetary policy adjustments in light of the current situation. As the world grapples with these challenges, it is important to closely monitor the performance of different economies and sectors to gauge the path of recovery. (Disclaimer: This news article is a summary of the original Reuters report.)
