SINGAPORE: A string of mostly cheery figures from across Asia yesterday has reinforced the recent message from Europe and the United States that the global economy is slowly looking up.
Japan’s manufacturing sector expanded in July at its fastest clip in a year; Hong Kong's economy grew in July for the second month in a row after taking a drubbing from the SARS outbreak; and Malaysian Prime Minister Datuk Seri Dr Mahathir Mohamad stood by his bullish full-year growth forecast for the country.
Asia took the good news baton from the US, where figures released on Thursday on gross domestic product (GDP) and new unemployment insurance claims beat Wall Street’s expectations.
Optimism about the euro zone is also rising. After a third straight increase earlier this week in Germany’s key IFO business confidence barometer, the Paris-based Organisation for Economic Cooperation and Development (OECD) said the 12-nation bloc had already embarked on a tentative recovery.
Economists in Asia cautioned, however, the improvement in the region’s fortunes was likely to be steady rather than spectacular given that the US in particular was still coping with the bursting of the 1990s investment bubble.
Output is seen likely to grow below potential across most of Asia for the near future, not least because exports to the United States, the region’s main market, have been falling.
The latest data showed US second-quarter GDP grew at an annual rate of 2.4%, beating forecasts of a 1.5% rise, but the outperformance was largely due to the fastest surge in defence spending in half a century as a result of the Iraq war.
In Japan, the headline index of the Reuters/Nomura/JMMA Purchasing Managers’ survey rose to 51.1 in July, its highest in 12 months, from 50.4 in June on the back of faster growth of manufacturing output and new orders.
The pick-up owed much to receding worries over SARS, the deadly flu-like disease which hit many of Japan’s Asian trade partners earlier this year.
Hong Kong suffered badly from SARS as tourism shrivelled, but the territory’s Purchasing Managers’ Index for July showed an economy on the mend. The index reading of 51.4, up slightly from 50.2 in June, was the strongest since June 2002.
The value of new mortgage approvals in Hong Kong rose sharply in June and anecdotal evidence suggests would-be homebuyers were also active in July. But economists said the positive data belied more fundamental weaknesses in the Hong Kong economy.
Caution was also the byword among manufacturers in Singapore, according to the findings of a government survey released yesterday.
“I think the second half will be better but we are seeing mainly revenue going into other cheaper cost regions like China, Malaysia, Thailand,” said Joel Leong, the chief financial officer at plastic components maker Juken Technology Ltd. “We are not expecting a very big pick-up for Singapore itself for the manufacturing side.” – Reuters