Asia economy gains ground in October, setting the scene for a solid finish to 2017
The following is an extract from IHS Markit's monthly Asia PMI overview presentation. For the full report please click on the link at the bottom of the article.
Asia growth picks up at start of fourth quarter
Asian economic growth picked up speed in October, linked to higher demand. The Asia Composite PMI™ Output Index, compiled by IHS Markit, rose from 51.4 in September to 52.1 in October, reaching a four-month high. The latest PMI survey indicates that the Asian economy is rising at an annual rate of just over 5.0% at the start of the closing quarter of 2017.
The pick-up in the improvement of business conditions across the region raises the prospect of stronger growth in the final quarter of 2017, having slowed to a one-year low on average in the third quarter. Overall, Asian growth remained well-balanced, with similar rates of expansion seen in both manufacturing and services sectors since the second half of 2016, suggesting that the current upturn has more room to go.
Asia PMI & economic growth
While growth of business activity and new sales volumes for manufacturing and services have risen in tandem this year, employment trends have not been in sync. Hiring in the service sector remained positive, and continues to run above the average seen in the past four years or so, reflecting a steady improvement in business conditions in the sector.
By contrast, staffing numbers at goods producers remained broadly unchanged in October. Employment in the manufacturing sector, in fact, has tended to fall over past six years, due in part to restructuring efforts in Chinese manufacturing. Nevertheless, recent readings signal some stabilisation and, as such, represent a change from the net job losses seen in the manufacturing sector throughout much of 2015 and 2016.
Bernard Aw, Principal Economist, IHS Markit
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