Asian manufacturing activity expanded in June thanks to growth in new export orders for consumer goods – particularly technology products – survey data published on Monday revealed.
Growth slowed in some of the region’s economies, however. Japan and India both saw new orders rise, but at a slower pace of growth, causing concerns over the outlook for the second half.
"While the Future Output Index, a proxy for business confidence, improved slightly in June, it remained significantly below the historical average, reflecting an air of caution among the region's manufacturers," said Bernard Aw, economist at IHS Markit.
Japan remains robust
Japan's economy, the region's second biggest after China, expanded for a tenth-consecutive month although at a slower rate than in May as the headline purchasing managers' index (PMI) slipped to 52.4 from 53.1. A number above 50 indicates expanding activity.
Global demand for consumer goods, such as electronics products, drove growth in the factory sector. South East Asia was a key source of new order wins, the IHS Markit data showed.
Paul Smith, senior economist at Markit, said: "Although the final PMI data for June confirmed that growth slowed, the sector continues to benefit from rising global demand."
Indian growth slows
India also experienced expansion in its manufacturing sector, but also at a slower rate as growth in new work continued to slow. Growth in total order books eased to a four-month low, Markit said.
The headline PMI fell to a four-month low of 50.9 in June from 51.6 in May.
China PMI contracts
Manufacturing in China, Asia's biggest economy, returned to expansion after a deterioration in May, pushing the headline index to 50.4, having dipped to 49.6 in May.