China manufacturing index falls to more than 3 year low

Output, orders and employment were all little-changed across the region during the month.

A reading above 50 indicates expansion.

Official data released on Monday showed India’s GDP grew 7.4 per cent during the July-September quarter this year.

The stand-out performer in the region was Japan.

“The services sector appears strong and there are some hints that accelerating credit growth and fiscal spending may have continued to support investment growth last month, following a rebound in October”, Julian Evans-Pritchard, an economist at Capital Economics, wrote in a research note.

The latest data highlight the two-speed nature of China’s economy as officials try to shift the economy’s focus from manufacturing to services in a transition that is proving to be rocky. However the figure marked an improvement from October’s 48.3, confounding predictions that it would remain unchanged.

Growth in the Irish manufacturing sector moved at the slowest pace in 21 months according to Investec’s monthly Purchasing Managers’ Index (PMI). However, exports continued to fall sharply.

With subdued demand at home and overseas, activity in China’s factories shrank in October for a third straight month, fuelling fears the economy may be cooling more rapidly than expected.

Only moderate downturns were meanwhile seen in South Korea and Vietnam. The rate of inflation was, however, only marginal.

That remained above the 50-level that signals expansion; but suggested momentum in the sector is weakening.

While the performance across the various industry specific sectors was mixed, there was better news on the survey’s individual activity gauges, with only inventories contacting during the month. However, it also said that domestic demand was weak, with companies still laying off workers – though at their slowest pace since May.

The PMI reading was the lowest since August 2012.

“However, there’s nothing new that will overly concern policymakers, leaving the door open for rates to rise later in the month”. Firms in Malaysia, Indonesia and India consequently saw higher input costs, and rates of decline eased in Taiwan and Vietnam.

The persisting slowdown China has put additional pressure on commodity prices.

DESPONDENT ASIA The manufacturing surveys showed few signs of vigour across Asia, apart from Japan, with sluggish demand at home and overseas forcing manufacturers from China to Indonesia to throttle back production, cut selling prices and shed more jobs.