A Rocky Global Recovery Foreseen by Global Purchasing Leaders

Despite facing persistent challenges such as raw material shortages, labor instability, rising inflation, and a slump in consumer demand, the global industrial sector is still grappling to regain its momentum.

Although factory activity in China saw a remarkable surge, marking its largest improvement in over ten years, manufacturing slowdowns persist in major economies across Asia and Europe.

According to the National Bureau of Statistics, China's manufacturing purchasing managers' index climbed to 52.6 in the previous month, the highest figure since April 2012.

Here’s what Chang Shu?and?Eric Zhu of Bloomberg Economics had to say:

“The recovery is outpacing the rebound at a comparable stage in early 2020 after the national lockdown was lifted. Looking ahead, it will be hard to keep up this brisk pace, with global growth slowing and pent-up demand after Covid reopening likely to fade.”

China's relaxation of strict Covid restrictions has led to a reopening that could boost the global economy and stabilize international trade. However, this initial economic boost from the world's second-largest economy was not sufficient to revive major Asian exporters such as South Korea, Taiwan, and Japan, which remained in a slump.

The data released on Wednesday showed a clear divergence between Southeast Asia's more domestically focused economies, which continued to expand, and North Asia's export-driven hubs, which lagged behind. This was evident in the manufacturing purchasing managers' indexes from S&P Global.

Asia Details:

• Thailand?posted the region’s best PMI reading of 54.8 as it ramped up production
• Taiwan?showed the sharpest improvement in the region, with its PMI jumping to 49 from 44.3
• Vietnam’s gauge jumped sharply to 51.2, crossing the 50 mark that separates expansion from contraction
• The Philippines,?Indonesia?and Myanmar likewise posted positive PMI readings
• A downturn steepened in?Japan, where the PMI fell to 47.7, its lowest in more than two years
• South?Korea reports its PMI data on Thursday, but its?export?slump?deepened?amid slowing global demand and a plunge in chip prices.

‘Stupid Slow’

The latest data release revealed that German factories remained in a contractionary phase for the eighth consecutive month. Additionally, French producers dropped below a level of 50 after experiencing growth in January. On the other hand, there were indications of expansion in Spain and Italy.

Later today, the US supply-management figures are expected to be released, but they are predicted to be sluggish and uneven. According to a report from the Dallas Fed earlier this week, a contact in the printing industry stated that their business and others in the industry has experienced a significant slowdown, as if "someone turned off the spigot."