IF Monday's flurry of disappointing manufacturing data is anything to go by, there'll be little festive cheer for regional economies. What's on the table could be a softer end to 2014 and a slow start to 2015. (see infographic)
November's Purchasing Managers Index (PMI) reports were largely dismal across Asia, and particularly so in places like Indonesia, South Korea and China. With operating conditions worsening amid tepid year-end demand, the latest set of falling PMIs suggests that the region's manufacturers continue to struggle.
Said CIMB economist Song Seng Wun: "We're well into the final quarter of 2014 and with the kind of PMI readings we're seeing so far, it suggests that we're going to end the year with a bit of a whimper as far as factory activities are concerned. It reflects a softer end to the year in terms of global demand and global growth, and a weaker beginning to 2015 too."
For one, Indonesia's PMI fell 1.2 to 48.0 in November, sinking to a record low in the survey's 44-month history. The overall deterioration was driven by strong contractions in output and new orders, along with a moderate reduction in employment.
South Korea posted a reading below 50 as well - signalling a contraction in the manufacturing sector - with a slight 0.3 rise to 49.0. New orders declined, alongside a further deterioration in production. Operating conditions faced by South Korean manufacturers have now worsened for the third consecutive month.
And while Japan, Taiwan and China's readings crossed the 50-point mark last month - a reading above 50 denotes growth in the manufacturing sector - all three showed a further loss of growth momentum.
Japan's PMI eased to 52.0 in November from 52.4 the month before. Taiwan's 51.4 reading marked a 15-month low and a drop from October's 52.0. In China, both the official and private PMI surveys showed a fall in readings - down 0.5 to 50.3 and down 0.4 to 50.0 respectively.
Noted UOB economist Francis Tan: "Typically China sees a boost to manufacturing before the Chinese New Year period, so November's poor readings show that sentiment on the ground is pretty bleak."
There was also news on Monday that factory activity contracted in the eurozone's three biggest economies of Germany, France and Italy. Said CIMB's Mr Song: "Outside of the US, there's really nothing to write home about."
Added Bank of America Merrill Lynch economist Chua Hak Bin: "(November's readings) give us a sense that this global recovery story is still pretty shaky. Europe and Japan's recoveries are weak, as is demand from China. There's not much Christmas cheer this year, and Singapore could disappoint as well."
Singapore's November PMI reading will be released on Tuesday night by the Singapore Institute of Purchasing & Materials Management (SIPMM). Private-sector economists polled by Bloomberg are expecting a reading of 51.6 after October's three-and-a- half-year high of 51.9.
But Dr Chua isn't convinced that Singapore's relatively higher PMI readings will translate into a better industrial production and exports performance. Indeed, a recent note from Capital Economics analyst Krystal Tan noted that Singapore's PMI "doesn't help much in estimating the rate of manufacturing output growth".
Singapore's trade ministry signalled last week that it expects growth to "ease slightly" for the rest of 2014, in line with a projected slowdown in the global economy. It expects fourth-quarter GDP growth of 2.2 per cent year-on-year.
Still, bright spots emerged from Vietnam and India. The former's PMI was up 1.1 to 52.1 in November, as output and new orders rose at faster rates and stocks of purchases increased at the sharpest pace in the survey's history.
India's PMI rose from 51.6 to 53.3 - a 21-month peak - supported by stronger output growth. Foreign orders and buying activity also rose while employment remained broadly stable. "However, a cautionary note was provided by survey data regarding input costs and output charges, as inflationary pressures intensified," said a Markit Economics report.