Asia growth gathers pace midway through Q3
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.
Asian economic growth gathered pace in August after a subdued start to the third quarter, according to PMI data. The Asia Composite PMI Output Index, compiled by IHS Markit, rose to 51.8 from 51.1 in July. The latest reading is historically comparable to an annual GDP growth rate of 5.3%.
While the pick-up in output growth was encouraging, the rate of increase remained below recent peaks, as was the case for expansion of new orders and employment. Growth of new business accelerated from July but remained below the average seen in the first half of the year. Likewise, employment recorded another mild increase as firms' expectations of future output failed to improve noticeably, with optimism stuck at one of the lowest levels seen so far this year.
Asia PMI & economic growth
New work, employment and expectations
Business activity in Asia continued to underperform compared to the global rate of expansion seen in August. Solid growth in the developed world (and in the US and eurozone in particular) were key drivers behind the improvement in global business conditions.
Uneven growth in Asian markets was key to the underperformance relative to the global picture. While China and Japan have recorded steady growth rates since late last year, India's private sector economy was besieged by two events that impacted business activity: the sudden withdrawal of high-denomination notes and the rollout of the consumption tax.
Bernard Aw, Principal Economist, IHS Markit
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