Global Manufacturing Activity Drops in August
Sluggish manufacturing activity throughout Asia in August
Purchasing managers’ index (or PMI) around the world dropped to a comparatively slower pace in August as worldwide demand for goods dropped. China, the manufacturing hub of the world, has been recording sluggish growth. China’s PMI numbers were at 47.3, below the crucial 50 level. A PMI reading below 50 indicates contraction in the manufacturing sector, which has been a major cause of worry for global investors.
Looking at the BRIC nations (Brazil, Russia, India, and China), except for India, all other economies recorded a reading below the threshold 50 level. Among major Asian developing nations, India and Vietnam were the only nations to record expansion. South Korea, Taiwan, Indonesia, Singapore, and Malaysia recorded contractions.
Interested in AIA? Don't miss the next report.
Receive e-mail alerts for new research on AIA
US, EU, and Japan were in a positive range, but warrant caution
Manufacturing slowed in the US. However, it was in the expansion bracket at 51.1. On the other hand, Japan exhibited a rating above the threshold at 51.7. The European Union performed well at 52.3 in August as Germany, Italy, and Spain displayed good numbers. Overall, central bank policies of keeping rates low and infusing liquidity into the economy has been a much needed support for economies to upscale their manufacturing sectors.
Impact on the market
On the other hand, American oil major Exxon Mobil (XOM) ended the day lower by -4.20%. Japanese ADR (American depository receipt) Toyota Motor (TM) fell by 3.41%, while Indian ADR HDFC Bank Limited (HDB) ended the day lower by -1.97%.