Asia’s factory activity expands on solid global demand

TOKYO - Asia’s factory activity expanded in January as solid global demand lifted export orders, private sector surveys showed on Feb 2, offering policymakers some assurance the hit from higher US tariffs has run its course for now.

“Exports from most countries have surged in recent months, and we think the near-term outlook for Asia’s export-oriented manufacturing sectors remains favourable,” said Mr Shivaan Tandon, Asia economist at Capital Economics.

China’s factory activity expanded at a faster pace in January as export orders rebounded, one of the surveys showed, which contrasted with an earlier official report showing activity faltering.

The RatingDog China General Manufacturing Purchasing Managers’ Index (PMI), compiled by S&P Global, rose to 50.3 from 50.1 in December, exceeding the 50-mark that separates growth from contraction and hitting the highest level since October.

The upbeat survey likely reflects China’s export drive that offset weak domestic consumption and helped the world’s second-largest economy expand 5 per cent in 2025.

The results of the private survey were more bullish than the official reading released over the weekend. That poll showed China’s factory activity unexpectedly deteriorated in January after snapping its worst contraction streak on record in December.

The private poll tends to reflect activity in smaller and more export-oriented firms. The RatingDog survey results have mostly been stronger than those from the official poll in recent months as exports stayed strong.

Japan and South Korea saw manufacturing activity grow at a multi-year pace as big markets like the US sustained momentum, the surveys showed, brightening prospects for Asia’s export powerhouses.

Japan’s S&P PMI rose to 51.5 in January from 50 in December, the strongest level since August 2022, driven by robust demand from key markets such as the US and Taiwan.

“Japan’s manufacturing industry propelled itself back into growth territory at the start of 2026, with firms signalling the strongest upturns in output and new orders for nearly four years,” said S&P Global Market Intelligence economics associate director Annabel Fiddes.

South Korea’s PMI also rose to 51.2 in January from 50.1 in December to mark the highest reading since August 2024.

The International Monetary Fund raised its 2026 global growth forecast in January on receding fears over the hit from US tariffs, and a continued artificial intelligence investment boom that has fuelled asset wealth and expectations of productivity gains.

Brightening prospects for global demand have helped factory activity expand across Asia. Taiwan’s PMI rose to 51.7 in January from 50.9 in December, while that of Indonesia rose to 52.6 from 51.2.

Factory activity in Malaysia, the Philippines and Vietnam also expanded in January, the surveys showed.

India’s manufacturing activity inched up in January as demand improved slightly, though the gain was not strong enough to lift business optimism or meaningfully increase hiring. REUTERS, BLOOMBERG