JAKARTA – Factories in Asia continued to experience weaker activity in July amid China’s economic woes, signalling that a turnaround for the sector could still be far off.

Factory activity in North Asia mostly contracted in July as lukewarm demand for goods hit new orders, output and export sales.

The slump was led by Taiwan, with the manufacturing purchasing managers’ index (PMI) sliding deeper into contraction territory to 44.1 from 44.8, while Japan’s stood at 49.6, according to S&P Global and au Jibun Bank. 

Export powerhouse South Korea saw its reading improve slightly to 49.4 from 47.8 in the previous month, but still below the 50 mark that separates expansion from contraction.

Domestic demand partly helped insulate South-east Asia, with new business and steady production propelling factory activity to expand to a region’s best 53.3 in Indonesia and 51.9 in the Philippines.

The PMI readings cloud the outlook for Asia, which was banking on a manufacturing revival to help drive economic growth after the easing of pandemic restrictions and supply chain bottlenecks. A disappointing rebound in China, combined with sticky inflation in the United States and Europe, is sapping demand for the region’s goods.

China’s official manufacturing PMI rose slightly to 49.3 in July, beating economists’ estimates but still in contraction territory for the fourth straight month.

That has prompted Beijing to unveil more stimulus measures to spur consumption, including for industries involved in home goods, food, plastic products and leather. BLOOMBERG