An economic recovery in Asia will likely be delayed until 2013, the latest batch of manufacturing surveys around the region suggest, with economists warning that any rebound remains dependent on Asia’s growth engine, China, picking up momentum.
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Data on Monday showed factory activity in China remained in contractionary territory for a second consecutive month in September, while manufacturing activity in regional peers, including export-focused Taiwan, and Indonesia pointed to a slowdown.
The HSBC Taiwan purchasing managers index (PMI) fell to its lowest level in ten months in September at 45.6, while Indonesia’s PMI weakened to 50.5 last month from 51.6 in August. A PMI reading above 50 indicates expansion, while a number below 50 implies a contraction.
Separately, exports out of Indonesia fell by a higher-than-expected 24.3 percent in August from a year earlier – reflecting weakening demand out of mainland China and the West.
“There are few signs yet that stabilization has set in, with fourth quarter data likely to show a further slide in activity,” Frederic Neumann, co-head of Asian economic research at HSBC told CNBC.
“This is the most challenging stretch for Asia's manufacturers since the slump caused by the Global Financial Crisis,” he added.
China - a major source of external demand for other countries in Asia - was widely forecast by economists to stage a turnaround in the second or third quarter of this year; however this has failed to materialize.
Full article here: CNBC
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