Trade war continues to batter Asian factories

HONG KONG/SINGAPORE • Manufacturing sentiment in Asia remained in the doldrums last month as the escalating United States-China trade war continues to hammer sentiment.

Purchasing managers' indexes (PMIs) for Japan, South Korea and Taiwan remained in negative territory.

Japan's Jibun Bank and IHS Markit PMI fell to 49.3 from 49.4 in July, the eighth consecutive month of contraction. The IHS Markit PMI for Taiwan fell to 47.9 from 48.1 in July.

While South Korea's IHS Markit PMI rose to 49 from 47.3 in July, it is still showing contraction. Readings below 50 signal a shrinking of factory activity.

The three manufacturing nations have been among the most exposed to trade tensions, a cooling technology boom and slowing demand in line with a weaker global economy.

China's Caixin Media and IHS Markit PMI rose to 50.4 from 49.9 in July, indicating renewed expansion and its highest level since March. Yet, the nation's official manufacturing PMI dropped to 49.5, according to data released last Saturday by the National Bureau of Statistics.

It was a soft picture across South-east Asia, with Indonesia slipping further into contraction - to its lowest since July 2017 - and the Philippines, Thailand, and Myanmar all expanding more slowly. PMIs for Malaysia and Vietnam - the weakest and strongest performers in the region - are due today.

On Sunday, higher US tariffs on about US$110 billion (S$153 billion) of Chinese imports took effect, as did Beijing's retaliatory duties on US goods.

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A version of this article appeared in the print edition of The Straits Times on September 03, 2019, with the headline 'Trade war continues to batter Asian factories'. Print Edition | Subscribe