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* China’s private PMI expands at the fastest rate in the decade
* South Korea’s PMI grows, Japan’s manufacturing activity stabilizes
* Factory activity also improves in Taiwan, Indonesia.
* Coronavirus infections resurgence, cloudy outlook, sentiment (adds India PMI, analyst quote, IMF forecasts)
TOKYO, Dec 1 (Reuters) – Asian factories rebounded further in November from the COVID-19 crisis, polls showed Tuesday, thanks to the rise of the economic powerhouse China, which has enabled the region to withstand the pandemic better than many of its peers.
China’s manufacturing activity accelerated at the fastest pace in a decade in November, a private sector survey showed, a sign that the world’s second-largest economy is recovering to pre-pandemic levels.
But a global resurgence in coronavirus infections has made the outlook highly uncertain, keeping governments and central banks under pressure to maintain or increase their massive stimulus programs, analysts say.
PMI surveys for other regions to be seen later on Tuesday are expected to show a continued recovery in manufacturing activity in the euro zone, while manufacturing activity in the US is forecast to continue.
“There is little sign that the major second waves of the virus in the United States and Europe have affected the Asian industry focused on exports, suggesting that external demand will continue to hold,” Capital Economics said in a research note.
China’s Caixin / Markit Manufacturing Purchasing Managers Index (PMI) rose to 54.9 from 53.6 in October, marking the highest level since November 2010.
The indicator remained well above the 50 level that separates growth from contraction for the seventh consecutive month. It was also in line with an official survey that showed activity in Chinese factories expanded at the fastest pace in more than three years in November.
A steady recovery in global demand also helped Japan’s manufacturing activity move a little closer to stabilization in November and South Korea accelerate at the fastest pace in nearly a decade.
“Overall, it appears likely that the Asian industry will remain strong over the next several months, which will help keep economic recoveries on track,” Capital Economics said.
Asia’s performance comes as many countries in the region have been more successful in containing the virus than their US and European peers.
China’s economy is forecast to grow 1.9% this year, while the US economy is expected to contract 4.3% and euro zone economies 8.3%, according to the IMF estimate. International in October.
PATCH RECOVERY
Polls on Tuesday showed that manufacturing activity also grew in Taiwan and Indonesia, a sign that the rebound in Chinese demand was propping up the region’s economy.
Au Jibun Bank Japan’s final manufacturing PMI reached 49.0 in November, up from 48.7 and a preliminary reading of 48.3 from the previous month.
South Korea’s IHS Markit PMI rose to 52.9 in November from 51.2 in October, the highest reading since February 2011 and marking the second month of activity expansion.
But the recovery of India’s manufacturing industry staggered in November as coronavirus fears weighed on demand and production, prompting companies to cut jobs for the eighth month in a row.
That underscored the patchy nature of the outlook for Asia, with some analysts still wary of the outlook with global and domestic demand vulnerable to infection trends.
“Japan’s economy probably slowed in July-September but avoided a contraction due to a rebound in exports and the effect of government campaigns to prop up demand,” said Takeshi Minami, chief economist at the Norinchukin Research Institute.
“But the economy may contract in January-March if households stop spending again. If companies in the service sector that suffer from falling sales cut spending, that could affect jobs and capital spending. “(Reporting by Leika Kihara; Editing by Ana Nicolaci da Costa)
