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Asia's factory activity weakened in September as soft Chinese demand and global economic uncertainty pointed to a challenging outlook, private-sector surveys showed, keeping policymakers under pressure to shore up fragile growth.
The region's manufacturers may get some relief in coming months from aggressive stimulus unveiled by Chinese authorities over the past week, including a lowering of interest rates and injection of liquidity into the banking system.
Factory activity in Japan shrank in September and expanded at a slower pace in Taiwan, purchasing managers' index (PMI) surveys showed on Tuesday, highlighting the toll soft global demand was taking on Asian exporters.
In a sign of the widening fallout from slowing U.S. growth, South Korea's export growth decelerated in September with shipments to the world's largest economy barely increasing, data showed on Tuesday.
In China, factories struggled to make headway, with the Caixin/S&P Global manufacturing PMI released on Monday showing a slump to 49.3 in September from 50.4 the previous month, marking the lowest reading since July last year.
It was a similar picture in Japan, which is relying on exports to boost economic growth amid subdued consumption. The final au Jibun Bank Japan PMI dipped to 49.7 in September from 49.8 in August, remaining below the 50.0 threshold that separates growth from contraction for the third straight month.
"Softer growth in new orders was the main factor weighing on manufacturing last month," said Shivaan Tandon, markets economist at Capital Economics, on Asia's PMI.
The PMI for Taiwan stood at 50.8 in September, falling from 51.5 in August. Manufacturing activity shrank in Vietnam, Malaysia, and Indonesia, the surveys showed.
Growth in India's manufacturing industry also cooled to an eight-month low in September as new orders - a key gauge of demand - grew at the weakest pace since December.
The International Monetary Fund (IMF) anticipates a soft landing for Asia's economies as moderating inflation creates room for central banks to ease monetary policies to support growth. It predicts growth in the region to slow from 5% in 2023 to 4.5% this year and 4.3% in 2025.
Expert Analysis:
Asia's weakening factory activity is a clear signal of the challenges facing the global economy. Softening demand and slowing growth in key markets like China and Japan could have far-reaching implications for investors and individuals alike.
For investors, this slowdown could impact the performance of Asian stocks and other related assets. It may be wise to reassess your investment portfolio and consider diversifying into more stable assets to weather the storm.
Individuals should also be prepared for potential economic headwinds, such as job market fluctuations and currency devaluations. Stay informed about the latest economic trends and consider adjusting your financial plans accordingly.
In conclusion, Asia's factory activity weakening in September is a red flag for the global economy. By staying informed and making prudent financial decisions, both investors and individuals can navigate these uncertain times with greater confidence and resilience.
