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Asia’s outlook darkens as factory activity slips, new orders fall

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TOKYO: Asia’s economic prospects looked gloomy as factory activity and export orders weakened across the region in November, with analysts expecting no quick rebound amid simmering global trade frictions.


In a sign corporate sentiment was taking a hit from worries over protectionism, manufacturers’ activity slipped in November in countries as varied as Indonesia, Taiwan and South Korea, the IHS Markit Purchasing Managers’ Index showed on Monday.


While factory activity rose slightly in China, new export orders extended their decline in a further blow to a sector already hurt by Sino-US trade frictions. The survey results came on the heels of data out earlier on Monday showing a sharp slowdown in Japan’s capital expenditure, which had been considered a key driver of the export-reliant economy.


Asian shares rallied on Monday after US and Chinese leaders meeting at the G20 summit in Argentina agreed on a truce in their trade conflict, offering some reassurance on the global economic outlook.


Bucking the trend, India’s factory activity in November expanded at the fastest pace this year, buoyed by a rise in domestic and foreign demand that allowed firms to raise prices.


China’s manufacturing sector activity grew slightly in November but new export orders shrank, reflecting weakening global demand, a private survey showed. South Korean factory activity in November contracted again after two brief months of growth as new export orders shrank by the most in over five years, a sign of increasing pressure on businesses from slowing global demand.


Japan’s economy shrank an annualised 1.2 per cent in July-September as natural disasters and slowing global demand hurt factory output and exports. — Reuters


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