Asia economic growth holds broadly steady in November, but still lags global expansion

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.

The Asian economy continued a steady growth path midway through the fourth quarter, according to latest PMI surveys. The headline Asia Composite PMI™ edged slightly lower to 51.7 in November from 52.0 in October, but otherwise showed a stable economic expansion. Furthermore, signs of rising demand and fuller order books, particularly in manufacturing, suggest that the pace of growth may pick up in early 2018.

Asia PMI & economic growth

Historical comparisons suggest that the latest survey data indicate that Asian GDP is maintaining an annual pace of growth of around 5.0%. However, the November survey found that Asian markets continued to underperform global growth, with the latter pulling higher on the back of stronger growth in developed markets - a trend that developed late last year. Job creation continued to run at only a modest, marginal pace as few firms felt pressured to raise capacity to meet future demand.

The PMI employment indices showed a mixed picture across the manufacturing and service sectors. While the gap between the manufacturing and service job markets narrowed, supported in part by a return to manufacturing employment growth, a slowdown in service sector employment gains was seen.

Manufacturers raised staff numbers for the first time since August to cope with the strongest rate of inflows in new business for over three years, but the gain was more than offset by slower growth in service jobs, resulting in a dip in overall employment growth. Nonetheless, the persistent (though modest) pressure on operating capacity, as indicated by a sustained rise in backlogs, suggest that further jobs growth can be expected, with many companies anticipating higher output in the year ahead.

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Bernard Aw, Principal Economist, IHS Markit
Tel: +65 6922 4226
Bernard.Aw@ihsmarkit.com