Asian factory activity expanded moderately in December thanks to robust demand in regional giant China, business surveys showed on Monday, but the prospect of tougher coronavirus curbs clouded the outlook for the recovering sector.
Manufacturing activity expanded in Japan, South Korea and Taiwan, according to PMI surveys, the latest indication that manufacturers in the region continue to bounce back from the damage caused by the COVID19 pandemic last year.
But a slowdown in Chinas factory activity growth underscores the challenges the region faces as rising cases globally force many countries to reimpose curbs on economic activity, clouding the outlook for exports.
Chinas CaixinMarkit Manufacturing Purchasing Managers Index PMI fell in December to 53.0 its lowest level in three months but stayed well above the 50level that separates growth from contraction.
External demand was likely impacted by the continued global spread of COVID19 and reimplementation of lockdowns, HSBCs China economist Erin Xin said in a research note.
The reading, which was lower than Novembers 54.9, fell roughly in line with the official gauge of factory activity that showed activity moderating at a high level.
Elsewhere in the region, output stabilised in Japan for the first time in two years, while Indias factory sector ended a rough 2020 on a stronger note as manufacturers boosted production to meet rising demand.
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