Asia’s once-busy factories are now slowing down as the world economy loses speed and export orders fall significantly.
According to data released by China’s HSBC Bank, the purchasing manager’s index(PMI) — a measurement of economic activity derived from surveys of private sector companies — declined to 49.2 percent, the lowest percentage since October, 2012.
In April this year the PMI stood at 50.4 percent. The downward trend indicates troubled economic times. A PMI above 50 percent reflects economic growth.
Export orders from South Korea, which manufactures for Samsung and Hyundai, fell to their lowest number since January of this year. A statement from HSBC attributed the Taiwan slowdown to the lackluster global economy.
“…There’s nothing in the system at the moment, certainly [not] in China, that suggests there is a big pick-up in store just around the corner,” said Victoria Clarke, an economist at Investec, a UK banking and securities firm.
Chinese decline in growth is expected to persist.
“We think China’s economic growth will probably continue to slide,” said, Zhiwei Zhang, chief specialist in the Chinese economy at Nomura, a financial services and banking firm with offices in Hong Kong.
India’s factories have also been effected by the worldwide economic slowdown, with a PMI at its lowest since 2009.
The US is also experiencing sluggish factory activity, with the PMI a notch above 50 percent. The EU also reported a contraction of factory activity.
Although a PMI number reflects factory activity in all manufacturing sectors, it can also be applied generally to apparel and textile manufacturing.