China's manufacturing activity fell for the fifth consecutive month in February, with sluggish demand in the world's second-largest economy impacting on manufacturers around Asia.
The National Bureau of Statistics reported Friday that China's official manufacturing purchasing managers index was 49.1 last month. However, the Caixin PMI, a private poll focusing on smaller enterprises, rose to 50.9.
According to surveys of factory managers from other regions, North Asian manufacturers reduced output and new orders last month due to low consumer spending in both local and international markets.
According to S&P Global statistics, Taiwan's PMI fell to 48.6 in February from 48.8 the previous month, remaining below the 50 watermark that separates growth and contraction.
For the twenty-first consecutive month, the trade-dependent economy's manufacturing conditions have remained in contraction zone.As a result of the largest drop in exports in 11 months, Japan's PMI dropped from 48 to 47.2, according statistics released by the Jibun Bank.
In addition to disappointing orders in the US and Europe, mainland China was identified as a major contributor to the decline in overseas sales. Consequently, industries reduced employment as well as consumer spending.
According to S&P Global Market Intelligence's Usamah Bhatti, "supply pressures were also evident, as delivery times reportedly lengthened to the greatest extent since February 2023" in reference to the Japan statistics. Anecdotal information indicates that suppliers were negatively impacted by the logistical interruption brought on by the Red Sea crisis and the lingering effects of the Noto Peninsula earthquake.
Thailand was the worst-performing country in Southeast Asia, with its PMI dropping from 46.7 in January to 45.3 last month. Additionally, new orders fell at the fastest rate since the epidemic. Malaysia and Myanmar continued to be in the area of contraction. In February, just three countries—Indonesia, the Philippines, and Vietnam—had ratings above 50.
Inflationary pressures erupted once more in the area. Growing raw material costs put pressure on factories, but they were unable to fully pass costs on due to weak demand.
Regarding the Vietnam release, S&P Global's Andrew Harker stated, "Manufacturers will need to see stronger and sustained growth of new business before they can be confident enough to invest in inputs and start to raise their selling prices more in line with their own cost burdens."
The World Trade Organization has issued new cautions that the unanticipated economic headwinds and the resurgence of protectionism have caused global trade to perform worse than anticipated this year, and this data coincides with their predictions. Major economies continue to have moderate demand, but shipping is hindered as war and drought affect the Red Sea and the Panama Canal.