As China’s erratic economic recovery hampered a wider rebound in demand, Asia’s factory activity contracted in December, indicating a wobbly start for the region’s manufacturing heavyweights in 2024.

A variety of purchasing managers’ indices (PMIs) released by S&P Global on Tuesday revealed that, in most Asian economies, manufacturing activity was still down at the end of the previous year, and that confidence was generally declining.

The PMIs revealed that Taiwan’s recession continued for the 19th consecutive month and South Korea’s industrial activity dropped back into decline, indicating the continued challenges of Asia’s tech-heavy economy.

Contrary to Beijing’s official PMI, which was announced on Sunday and stayed in contraction zone for the third consecutive month, China’s Caixin PMI indicated a surprise uptick in activity in December.

The prognosis for China’s main trading partners remains clouded by the country’s varied economic prospects.

“Overall, the economic outlook for (China’s) manufacturing sector continued to improve in December, with supply and demand expanding and price levels remaining stable,” Wang Zhe, Senior economist at Caixin Insight Group said.

“However, employment remained a significant challenge, and businesses expressed concerns about the future, remaining cautious in areas including hiring, raw material purchasing, and inventory management.”

Beijing has implemented a number of measures in recent months to support a weak post-pandemic recovery, but the world’s second-biggest economy is finding it difficult to pick up steam due to a severe real estate collapse, dangers associated with local government debt, and weak global demand.

In other parts of Asia, PMI data revealed that industrial sector activity in Malaysia and Vietnam continued to be in contractionary mode, notwithstanding a minor acceleration in Indonesia.

On Wednesday, India will reveal its PMI for the previous month, and on Thursday, Japan will release its.

Even though Asia’s PMIs for December were largely negative, other recent data suggests the post-pandemic rebound in the area is beginning to gather momentum.

Stronger building and manufacturing helped Singapore’s gross domestic product grow faster in the December quarter compared to the same period last year, according to figures released on Monday.

According to figures released on Monday, South Korea’s exports increased in December as well, albeit more slowly, as strong global sales of semiconductors were offset by weaker Chinese demand.

(Adapted from Reuters.com)