Some encouraging signs from the PMI data today and over the weekend, but there is a but.
First, the good:
- Sunday: China official PMIs (March): Manufacturing 50.5 (vs. expected 49.6), Services 54.8 (54.0)
- Monday: China - Caixin Markit Manufacturing PMI for March 50.8 (expected 50.0)
- Japan Manufacturing PMI (March, Nikkei / Markit 'final' ): 49.2 (Preliminary was 48.9)
- ASEAN PMI moved up into growth in March, at 50.3
But, South Korea (data out earlier), not so great. Like Japan, the SK PMI did improve, coming in at 48.8 in March
- from 47.2 in February
But still, a reading on the weak side.
- Falling new orders from domestic and overseas markets
- further cutbacks to production
- Employment was also reduced
- Price discounting by competitors drove panellists to decrease selling charges to stimulate sales
- Expectations remained positive, with firms anticipating output volumes to pick up over the coming year, but sentiment was notably weaker than the historical average.
Joe Hayes, Economist at IHS Markit:
- "Manufacturing firms in South Korea remained under pressure during March, with demand continuing to flag and production cutbacks prevailing. Of concern to panellists were the economic conditions in China and Europe, while slowing domestic growth momentum was also reportedly a factor pulling on the sector.
- "Indeed, firms look set to expect challenging conditions to persist, as selling prices were cut amid reports of falling charges at competitors and requests for discounts from clients. A subdued outlook was also reflected in output expectations, which remained notably weaker than the survey's historical average"
