After the pandemic, manufacturers in Asia’s two largest economies are performing very differently.
China’s factory activity increased at the quickest rate in more than a decade last month, according to official statistics.
However, manufacturing activity in Japan contracted in February at the quickest rate in more than two years.
Companies around the globe are weighing the benefits of reopening as Covid restrictions loosen against the rising costs of everything from energy to workers’ wages.
China’s manufacturing purchasing managers’ index (PMI) rose to 52.6 from 50.1 in January, according to China’s National Bureau of Statistics. It was the highest monthly reading since April 2012.
PMIs are a measure of economic trends that provide businesses, central banks, governments. And investors with vital information regarding the current and prospective business climate.
The PMI is displayed as a number between 0 and 100. A reading above 50 demonstrates an expansion in activity compared to the previous month. A number less than 50 denotes contraction. The quantity of change increases the further the number is from 50.
China’s much better-than-expected performance occurred after the rigorous coronavirus measures in the world’s second-largest economy were eased late last year.
In 2022, the nation experienced one of its worst years in nearly half a century as a result of pervasive lockdowns and Covid-19 outbreaks.
Meanwhile, in Japan a private manufacturing PMI fell to 47.7 in February from January’s 48.9, indicating the fastest fall since September 2020.
The data highlighted the major challenges faced by businesses in the world’s third-largest economy, including a global slowdown, the soaring cost of raw materials, and demands for firms to raise wages for their employees to alleviate a cost of living crisis.
The figures came a day after Japanese government data showed the country’s factories, notably automakers and computer chip producers, cut output in January at the fastest rate in eight months.
