The Nikkei India Manufacturing Purchasing Managers’ Index (PMI) has dropped to over a two-year low in November at 50.3. Although soft demand is weighing on India’s manufacturing activity, the PMI data shows its manufacturing sector is doing far better than other countries in Emerging Asia (see chart).
Weak demand is weighing on manufacturing and production activity in most of the Asian countries.
China’s Caixin General Manufacturing PMI improved marginally to 48.6 in November, but was still below the 50 mark due to soft client demand. A reading above 50 indicates expansion, while one below 50 denotes contraction.
Indonesia’s manufacturing activity slipped to a seven-month low of 46.9 due to further deterioration in operating conditions as demand declined at the sharpest rate in the history of the series and job cuts continued.
Malaysia’s manufacturing PMI slipped to 47, a record low since the survey began in July 2012, as both production and new orders declined at a fast pace.
Vietnam’s manufacturing PMI dipped below the 50 level to 49.4 in November as new orders and employment fell marginally. Taiwan and South Korea’s manufacturing PMI also slipped to 49.5 and 49.1, respectively, in November due to marginal deterioration in business conditions.
Japan was the only country in Asia, besides India, where manufacturing activity expanded; but then, the recovery in developed countries has in general been more robust than in emerging markets.
India’s outperformance raises the question: will the Indian market continue to do better than other emerging markets?