Asian PMI surveys: manufacturing

As of

July 2013

Executive summary: July surveys 2013

East Asian manufacturing remained in contractionary territory in July, constrained by weak demand inside and outside the region.

The majority of manufacturing exporters are now below the 50 threshold, with (yet to report July) Singapore and Japan the key exceptions. Korea fell heavily to 47.2 from 49.4 previously, having been a clear outperformer just three months ago. Taiwan gave away some its June bounce in July, dropping from 49.5 to 48.6. Its 4mth average reading is now 49.0.
Japan remains a positive outlier among the North Asian group, but its six month streak of consecutive improvement in the headline reading came to a close in July (52.3 in June versus 50.7). The detail weakened appreciably. Indian manufacturing is recessed: the output index has been sub 50 for 3 months and new orders for two. The respective full sample averages for those two series are 58.2 and 59.5. The stagflation proxy deteriorated, with output prices rising 2.5pts against 0.7pts for output. The Indonesian survey was softer than the May and June editions, with the headline losing ground, and the forward looking aspects of the detail quite weak. A material step down in future output is predicted by the decelerating order flow, and now increasing inventories as well. Vietnams headline reading improved to 48.5 from 46.4, but the quality of the detail fell away sharply. Note that we dealt with China in an earlier missive, but we have included Chinese charts in the pack for reference purposes.

Sydney time, Singapore is out at 23:30; and Hong Kong is out next week.

The Asian supply chain: headline PMIs

65 60
55 50 45 40 35 Apr-04 Korea Japan Singapore Apr-06 Taiwan China HK Apr-08 index index

65 60
55 50 45

Headline manufacturing PMIs ex HK, which is a composite. Source: Markit.

40 35

Apr-10

Apr-12

The Asian supply chain: orders-inventories

1.5 1.4 1.3 1.2 1.1 1.0 0.9 0.8 0.7 0.6 0.5 Apr-04
index index

Korea Japan Singapore Apr-06

Taiwan China HK Apr-08

Manufacturing new orders to inventories ratios ex HK, which is a composite. Source: Markit.

1.5 1.4 1.3 1.2 1.1 1.0 0.9 0.8 0.7 0.6 0.5

Apr-10

Apr-12

Chinas manufacturing PMI: Markit-HSBC

65 60
55 50
Headline (lhs)

index

index

1.5

1.0
New orders (lhs) Production (lhs) New orders to inventory ratio (rhs) Sources: Markit, Westpac Economics.

45 40 35 Jan-05

0.5 Jan-07 Jan-09 Jan-11 Jan-13

Chinas manufacturing PMI: orders

65 60
55 50 45 40 35 30 Jan-05
Order backlog New orders New export orders
Sources: Markit, Westpac Economics.

index

index

65 60
55 50 45 40 35 30

Jan-07

Jan-09

Jan-11

Jan-13

Indias manufacturing PMI

75
70 65 60 55 index ratio

1.5
1.4 1.3 1.2 1.1

50
45 40 35 Dec-04 Production (lhs) Headline (lhs) Orders to inventories (rhs) Dec-06 Dec-08
Sources: Markit.

1.0
0.9 0.8 0.7 Dec-10 Dec-12

Indias manufacturing PMI: orders

75
70 65 60 55 index ratio

75
70 65 60 55

50
45 40 35 Dec-04 New orders New export orders Backlogs of work Dec-06 Dec-08

50
45 40
Sources: Markit.

35 Dec-10 Dec-12

Japans manufacturing PMI

70 60
50 40 30 20 10 Apr-04
Headline (lhs) Production (lhs) Orders to inventories (rhs)

index
Sources: Markit.

ratio

1.3 1.2 1.1 1.0 0.9 0.8 0.7 0.6 0.5 0.4 0.3

Oct-05

Apr-07

Oct-08

Apr-10

Oct-11

Apr-13

Japans manufacturing PMI: orders

70 60
50 40 30 20
Sources: Markit.

index

ratio

70 60
50 40

New orders New export orders Backlogs of work

30 20 10

10 Dec-04

Dec-06

Dec-08

Dec-10

Dec-12

Koreas manufacturing PMI

75
70 65 60 55 50 45 index
Sources: Markit.

ratio

1.5
1.4 1.3 1.2 1.1 1.0 0.9

40
35 30 Apr-04 Apr-06 Apr-08

Headline (lhs) Production (lhs) Orders to inventories (rhs)

0.8
0.7 0.6

Apr-10

Apr-12

Koreas manufacturing PMI: orders

70 65
60 55 50 45 40
Sources: Markit.

index

ratio New orders New export orders Backlogs of work

70 65
60 55 50 45 40 35

35 Dec-04

Dec-06

Dec-08

Dec-10

Dec-12

Taiwans manufacturing PMI

90
80 70 60 50 index ratio

40
30 20 10 Apr-04
Headline (lhs) Production (lhs) Orders to inventories (rhs)

Sources: Markit.

1.5 1.4 1.3 1.2 1.1 1.0 0.9 0.8 0.7 0.6 0.5

Oct-05

Apr-07

Oct-08

Apr-10

Oct-11

Apr-13

Taiwans manufacturing PMI: orders

80 70
60 50 40 30 20
Sources: Markit.

index

ratio

80 70
60 50 40

New orders New export orders Backlogs of work

30 20 10

10 Dec-04

Dec-06

Dec-08

Dec-10

Dec-12

Singapores manufacturing PMI

65 60
55 50 45 40 35 Apr-04
Headline (lhs) Output (lhs) Electronics headline (lhs) Orders to inventories (rhs)
Source: Markit.

index

ratio
July not yet available

1.3 1.2
1.1 1.0 0.9 0.8 0.7

Apr-06

Apr-08

Apr-10

Apr-12

Hong Kongs composite PMI

70
index ratio
July not yet available

60

50
Headline (lhs)

40

Production (lhs) New orders from China (lhs)

Sources: Markit.

30 Apr-04

Orders to inventories (rhs)

1.5 1.4 1.3 1.2 1.1 1.0 0.9 0.8 0.7 0.6 0.5

Apr-06

Apr-08

Apr-10

Apr-12

ASEAN manufacturing
65 60
55 50 45
Headline manufacturing PMIs. Source: Markit.

index Singapore Vietnam Indonesia

index

65 60
55 50 45 40

40 Apr-04

Apr-06

Apr-08

Apr-10

Apr-12