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Euro malaise hits Asian factory sector

Monday, October 01, 2012 - 01:54

Oct. 1 - Asia's manufacturers are continuing to struggle in the face of tepid demand from the United States and Europe, according to business surveys and data that underline the fragility of the global economy. Lisa Yuriko Thomas reports.

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Little relief for Chinese manufacturers. Official manufacturing PMI figures for September clocked in at 49.8 - in line with forecasts. This marks the second straight month of contraction. China's smaller private firms aren't doing any better. The HSBC manufacturing PMI shrank for the 11th consecutive month in September. Annual economic growth is expected to slow in the third quarter of this year to 7.4% - that's according to a Reuters poll. It's a growth figure we should get used to. Jim O'Neill of Goldman Sachs: (SOUNDBITE) (English) CHAIRMAN, GOLDMAN SACHS ASSET MANAGEMENT, JIM O'NEILL, SAYING: " We're shifting from an era which is effectively been 30 years. I think the past 30 years growth has averaged ten and a quarter, to an era where it's going to be, for this decade, more like seven. Some sectors that were so strong in the past era that are going to have quite a few adjustment challenges." Some economists say recent easing measures should help from the fourth quarter onwards. The latest move: a 57 billion dollar cash injection in the money markets. China has also been trying to kick-start its export engine, recently announcing moves to speed up payment of export tax rebates and boost lending. But policy makers have to walk a fine line. (SOUNDBITE) (English) CHAIRMAN, GOLDMAN SACHS ASSET MANAGEMENT, JIM O'NEILL, SAYING: "Chinese policymakers do not want to repeat what they did in '09 and stimulate the economy too much. It's not clear that the momentum is turning yet, but I'm pretty sure that it won't turn into a true hard landing as some people are saying." Yet given the ongoing weakness in key export markets like Europe, manufacturers aren't likely to be cheering any time soon. Lisa Yuriko Thomas, Reuters.

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Euro malaise hits Asian factory sector

Monday, October 01, 2012 - 01:54