China manufacturing PMI falls to 48.2, according to HSBC
Conditions worsen in Korea, Taiwan and Vietnam, HSBC says
Indonesia buffered by large domestic economy
Manufacturing activity in much of Asia slowed further in June, economic data showed Monday, pointing to the likelihood of more central bank easing to try to jumpstart economic growth.
Indonesia was a notable standout, with manufacturing there picking up in a sign Southeast Asia’s biggest economy is showing more resilience to tough overseas conditions than other parts of Asia that are more dependent on exports.
The final HSBC China manufacturing purchasing managers index fell to 48.2 in June from 48.4 in May.
A reading below 50 indicates a contraction in manufacturing activity from the previous month, while a reading above 50 indicates expansion.
China’s official PMI estimate for June, released Sunday, came in at 50.2. The reading was slightly better than economists had forecast at 49.8, but was down from May’s 50.4 showing.
HSBC surveys in Korea and Taiwan showed manufacturing slipped into contraction in June.
“These data depict economies that are moving sideways. It reinforces the view that things aren’t horrible, but they’re not good either,” said Tim Condon, chief Asia economist at ING Bank.
Condon said that with price pressures easing across the region, there is scope for central banks to loosen monetary conditions, particularly in China and in Korea.
HSBC’s PMI gauge for Taiwan fell to 49.20 last month from 50.50 in May, its first contraction since January.
The bank’s June reading for South Korea slipped to 49.4, from 51.0 the previous month.
In Vietnam, manufacturing conditions worsened even more sharply, with HSBC PMI dropping to 46.6 from 48.3 in May.
Indonesia’s HSBC PMI rose to 50.2 in June from 48.1 in May.
“The June report underscores the extent to which domestic demand is helping to buffer the economy against ongoing external headwinds,” HSBC economist Su Sian Lim said in a note.