Asia’s factories sustain momentum as Japan halts 11-month slump

ASIA’S factory activity continued its expansion in May, supported by a recovery in new orders even as China’s rebound struggled to gain traction.

Manufacturing Purchasing Managers Index for South Korea and Japan returned to growth in May, halting months of slump, according to S&P Global and au Jibun Bank. The gauge for Japan turned positive for the first time since May 2023 while Korea returned to expansion after below 50 readings for two months.

Export powerhouse Taiwan’s index improved to 50.9 last month from 50.2 in April, while the index for Vietnam sustained its momentum, staying above the 50 level that separates expansion and contraction.

“South Korea’s manufacturing sector appears to have caught a second wind,” said Joe Hayes, principal economist at S&P Global Market Intelligence. “Qualitative evidence from the survey also paints a promising forward-looking picture.”

The latest set of data signal a broadly improving outlook for manufacturers on strength in new orders, despite signs of risks to China’s recovery and lingering weakness in demand for goods.

Data released on Friday (May 31) showed that China’s factory activity unexpectedly slipped into contraction in May, snapping two months of gains. The official manufacturing purchasing managers index fell to 49.5 from 50.4 in April. BLOOMBERG