BEIJING, Nov 1 (Reuters) - Asian manufacturing activity picked up in October led by China, where factory sector growth hit its fastest pace in 18 months off the back of new orders, purchasing managers’ reports showed on Friday.
The surveys provide a more upbeat view of world demand following a month in which a political standoff in Washington over the U.S. debt ceiling and the sixth straight cut in IMF global economic forecasts had raised fresh concerns about the health of the global economy.
China’s official purchasing managers index (PMI) rose to 51.4 in October, up from 51.1 in September and above expectations for a reading of 51.2. A PMI reading above 50 suggests expansion from the previous month, while a figure below 50 points to contraction.
“With global demand momentum likely to pick up gradually and domestic demand growth remaining solid, we expect GDP growth to comfortably exceed the government’s bottom line in the coming quarters,” Louis Kuijs, an economist at RBS, said of the China PMI in a client note.
The China PMI offered some support to weak Asian markets on Friday and data elsewhere in Asia also pointed to brighter economic prospects.
The HSBC/Markit PMI for South Korea showed factory activity expanded for the first time in five months and separate data showed the country’s exports in October handily beat expectations to hit a record high of $50.5 billion.
Factory activity in major exporter Taiwan, key to many global tech supply chains, was running at its fastest pace since March 2012, an HSBC/Markit PMI showed.
Japan reported on Thursday that its factory activity grew at the fastest pace in more than three years as the Markit/JMMA PMI rose to a seasonally adjusted 54.2, adding to hopes that the world’s third-largest economy and home to big brand names like Sony and Toyota is pulling out of two decades of stagnation.
PMI reports from India and the United States are expected later in the day. A euro zone PMI is due on Monday.
The rise in China’s official PMI offered some relief to the growth outlook for the economy after a disappointing run of data last month, which included an unexpected slide in exports.
A breakdown of the sub-indexes showed that new orders in large industries reached 53.8, while for small industries the number was just 48.8, suggesting larger firms are benefiting more from the stabilising economy.
“The PMI data for October shows a continued increase, indicating a preliminary stabilisation in the economy,” Zhang Liqun, an economist at the cabinet think-tank Development Research Center, said in a statement released with the PMI.
“The foundation for a recovery is not yet solid.”
The HSBC/Markit PMI for China rose to 50.9 in October from 50.2 in September, suggesting factories were humming at their strongest pace in seven months.
The figures showed a surprise jump in new export orders, with many factories reporting stronger demand from the United States.