about 1 month ago • 2 mins
What’s going on here?
Manufacturing activity in Asia shriveled up in October, according to data released on Wednesday
What does this mean?
There are amazing tours of Asia out there: food-themed, city-themed, motorcycle-themed, you name it. But at the moment, a showcase of the region’s economies is proving the most captivating of all. Many Southeast Asian countries saw their economies shrink in October, with industries squeezed by rising costs and lagging orders, according to S&P Global’s manufacturing purchasing managers’ indexes. Japan and South Korea also had little to show off: they scored 48.7 and 49.8 respectively, barely budging from the month before and hanging below the 50-mark that indicates growth. China had no reason to brag either. The world’s second-biggest economy’s start-stop recovery is still making investors nervous, and that stuttering was clear when a private measure of Chinese factory activity dipped unexpectedly.
Why should I care?
For markets: 99 problems and the government can’t fix one.
China’s recent data indicates that the government’s supportive policies are still struggling to buoy up the economy. No wonder: Asia’s usually the powerhouse of manufacturing, but trimmed-down demand from cash-strapped US and Europe has left the region twiddling its thumbs. Thing is, the rest of the world will feel the effects if the globe’s engine runs out of steam – and that’s only looking more likely now that inflation-fueling energy prices are on the rise again.
The bigger picture: There’s no solace on the interwebs.
Asia’s digital economy is slowing down too, with regular customers watching the pennies and cutting back their spending. Case in point: research from Google, Temasek, and Bain & Co. predicts that the amount of money spent online across the region will tick up by roughly half as much as it did last year – the lowest rate in over five years. Combine that with company targets moving further out of sight, and many sectors are seeing their stocks take a tumble.
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