Manufacturing activity slowed or contracted in Asia’s largest economies last month, reflecting stronger headwinds from the eurozone crisis and weaker growth in the US.
China and India recorded slower manufacturing growth for July, while Japan posted its worst performance since last year’s earthquake and tsunami. South Korea also saw its sharpest fall in exports this year. “Asia is getting caught up in the European mess with trade finally starting to buckle,” said Frederic Neumann, economist at HSBC. “The latest data suggest there is much more pain to come on the export side.”
Chinese manufacturing activity fell slightly in July despite expectations for a rise after Beijing cut interest rates and urged banks to increase lending to shore up the economy, with the official purchasing managers’ index inching down from 50.2 in June to 50.1, just above the 50 reading that separates expansion from contraction.