Asian manufacturing sectors ended a strong 2017 on a mixed note, with activity at multi-year highs in Taiwan and India and surprisingly picking up in China.
“Robust external demand and accommodative domestic monetary policy should help keep Asian manufacturing sectors in good shape,” said Krystal Tan, Asia economist at Capital Economics.
In China, manufacturing growth unexpectedly picked up to a four-month high in December amid a surge in new orders, suggesting continued strength in global trade, reports Reuters.
The Caixin/Markit Manufacturing Purchasing Managers’ Index (PMI) rose to 51.5 last month, from 50.8 in November, and far outpaced economists’ expectations for a dip to 50.6. The 50-mark divides expansion from contraction on a monthly basis.
Survey showed a slowdown in growth amid a crackdown on pollution and measures to curb risky financing and cool the housing market.
Analysts say the difference stems from the fact that the Caixin/PMI index tracks smaller, private firms, more sensitive to exports.
China is expected to have grown by close to 7.0 per cent in 2017, but the economy is likely to slow in 2017. Beijing is expected to target 2018 growth at around 6.5 per cent.
In November, the Bank of Korea raised interest rates for the first time in more than six years, becoming the first major Asian central bank to hike since 2014.
Malaysia and the Philippines could hike early this year, then Australia and New Zealand later on.
Taiwan saw manufacturing activity hitting its highest since April 2011 at 56.6 last month, according to a December survey.
Singapore on Tuesday posted slower economic growth in the fourth quarter as manufacturing shrank 11.5 per cent following an eye-popping 38 per cent jump in the previous three months.
December factory activity accelerated in Vietnam, but shrank marginally in Malaysia and Indonesia.