Economic reports across the Pacific
While there is still a risk that continued fall-off in global demand may further undermine China’s growth, the January PMI data at least provide further support to our view that GDP growth should be stronger in Q1 2009 than in Q4 2008. In fact, we believe the government’s massive stimulus package should be able to push up GDP growth further in coming quarters and help achieve 8.0% growth in 2009.– Mingchun Sun, Nomura
(Chart source: CLSA report on manufacturing)
Singapore’s purchasing managers’ index, a leading indicator for manufacturing, edged up in January from the previous month but showed that the industry continued to contract for the fifth consecutive month. The Singapore Institute of Purchasing & Materials Management said on Tuesday its purchasing managers’ index stood at 45.0 in January, a marginal increase from 44.8 in December. A reading below 50 points indicates that the manufacturing sector is contracting. The slight increase versus December was due to an expansion in stocks of finished goods, but overall, new orders, production output and employment continued to contract. Singapore, which has been followed into recession by Hong Kong and Japan, saw its key electronics industry shrink for the fourth consecutive month.
South Korea’s trade is in free fall. From the Telegraph:
The figure was worse than analysts had expected from the world’s biggest producers of mobile phones, computer chips and ships. Global demand for technology-related goods is diminishing as consumers in key markets including the US and Europe cut back on spending.
Thailand is not immune to the sharp dropoff in commodity prices. From the Bangkok Post:
Consumer prices contracted for the first time in nearly 10 years in January due to cooling oil and utility prices.The consumer prices, which are now based on 417 product items compared with 374 items previously, dropped 0.4% from a year earlier, paring the gain it made in December 2008.
India’s exports are declining on an annual basis – the first time since 2003.From Bloomberg:
India’s exports declined [annually] for a third straight month in December as the global recession reduced overseas orders, curbing growth in Asia’s third-largest economy.
Merchandise shipments dropped 1.1 percent to $12.7 billion from a year earlier, the government said in New Delhi today. Imports in December rose 8.8 percent to $20.3 billion, widening the trade deficit to $7.6 billion.
Falling exports may cause 10 million job losses by March, according to estimates from the Federation of Indian Export Organisations trade group, which would be a blow to Prime Minister Manmohan Singh’s re-election bid in polls in April and May. Exporters employ about 150 million people in India, the biggest provider of jobs after agriculture.
The Reserve Bank of Australia slashed its rate, but future expansionary policy is expected to be more incremental. From the Financial Times:
While the RBA noted that the near-term outlook for the global economy was the weakest for many years, it also suggested further rate cuts would be smaller and more spaced out.
Going forward, I will be looking for the silver linings of the various U.S. economic reports. It feels like they will start popping up here and there, but then again, they may not…we will see.
Originally published at the News N Economics blog and reproduced here with the author’s permission.