Manufacturing in China
An employee works at a production line inside a Geely factory in Ningbo, Zhejiang province, China.Reuters file

In what could be a harbinger of a prolonged slowdown, four countries, including India, saw their manufacturing activity fall sharply in December 2015.

India's manufacturing activity, as measured by Nikkei's Manufacturing Purchasing Managers' index and compiled by Markit, contracted for the first time in 28 months to 49.1.

The reading for November in the world's fastest-growing economy was above the 50-mark that separates contraction from expansion.

China, the world's second-largest economy, reported yet another month of contraction in December 2015. The Caixin China General PMI was 48.2, the sixth straight month of contraction.

"The Caixin China General Manufacturing PMI for December is 48.2, down 0.4 points from the reading for November. This shows that the forces driving an economic recovery have encountered obstacles and the economy is facing a greater risk of weakening," He Fan, Chief Economist at Caixin Insight Group, said in a note on 4 January, 2016.

"Production declined for the seventh time in the past eight months, driven in part by a further fall in total new work. Data suggested that client demand was weak both at home and abroad, with new export business falling for the first time in three months in December," the note added.

The contraction in China, along with a weakening yuan, had triggered a more-than-7% crash in Chinese stock exchanges on Monday, prompting a halt to trading.

Singapore also saw a decline in manufacturing activity in December 2015. The sixth straight month of contraction was caused by a fall in new orders and absence of new export orders.

The Purchasing Managers' Index (PMI) was 49.5, a tad better than from the November reading of 49.2, reported Channel News Asia.

Things were equally gloomy in the US, the world's largest economy. The country's manufacturing activity, assessed by the Institute of Supply Management, was down at 48.2 from 48.6 in November.

The US had managed to stay above the demarcating threshold of 50 in October and September.

Eurozone bucks the trend

Eurozone was an exception to the general trend, with Markit's final manufacturing Purchasing Managers' Index (PMI) for the bloc rising to a 20-month high of 53.2, just above a flash reading of 53.1 and of 52.8 in November, reports Reuters.

Also read
Quick Links