Factory production in Asia grew in March as a strong recovery in global demand helped manufacturers overcome the downfalls from the pandemic. A series of positive factory surveys released reinforce market optimism that vaccination programmes, as well as strong growth in the US and China, will help economies emerge from the hardships of 2020.
Japan and South Korea saw factory activity expand in March due to strong demand at home and abroad, purchasing manager indexes (PMI) showed. Although China’s factory activity in March expanded at the slowest pace in almost a year, underlying economic conditions remained positive. While the Caixin/Markit Manufacturing PMI, which collects data on smaller firms, dropped to 50.6 in March from February’s 50.9, missing market expectation, the private-sector survey came after the release of the official manufacturing PMI that showed Chinese factories increasing production after it slowed down briefly during the Lunar New Year holiday.
Activity in big, export-reliant economies was swift. The au Jibun Bank Japan PMI rose to a seasonally adjusted 52.7 in March from the previous month’s 51.4 reading, marking the fastest expansion since October 2018. South Korea’s PMI stood at 55.3 in March, with activity growing for a sixth straight month.
Manufacturing activity also increased in Taiwan, Vietnam and Indonesia, the March PMI surveys showed. Malaysian activity continued to decline but at a slower pace.