SINGAPORE - Growth in Asia is unlikely to rebound in the near future as tepid import demand from the West continues to be a drag on exports, a new report released by HSBC said.
"Things are decidedly soggy everywhere," said Mr Frederic Neumann, co-head of Asian economics research at HSBC, in the report.
Since roughly 2012, exports have essentially stagnated, registering barely a third of the growth seen in the mid-2000s - and they have gotten a lot worse of late.
Shipments from China, Korea, and Taiwan - the region's bellwethers for the global industrial cycle - declined by over 8 per cent in April over the same month a year ago. This came after a 10 per cent contraction the previous month.
New export orders as reported by purchasing managers indices (PMIs) last month suggest that further weakness lies in store.
Said Mr Neumann: "Rarely have we seen such a prolonged period of flat shipments. There was a brief such episode in 2011 during the height of the Eurozone crisis, and before that during the tech slump (2001-2002)."
Asia's export slump is not merely a reflection of the weak euro - instead, there are signs that the region is facing deeper structural challenges, Mr Neumann said.
The euro is down nearly 20 per cent year-on-year against the US dollar, weighing on Asian exports to the region.
But when one looks at the the level of exports from emerging Asia in volume terms - thus unaffected by exchange rate swings - there has been virtually no growth since last August, he said. Moreover, the volume of shipments has started to fall again.
"This means exports are weak for structural reasons, and not just because gyrating currencies are affecting the data," said Mr Neumann.
"This is not necessarily, as is often claimed, due to soaring wages in China," he added. "Rather, the issue is that import demand in the West has failed to fire up. And that's not something that will disappear overnight."