Economic mood sours in US, China and Asia in April, as green shoots wilt

Positive mood from better-than-expected economic growth in major economies dampened by poor manufacturing sentiment across many exporting nations

Purchasing managers’ index in export powerhouses South Korea and Taiwan weaken, joining the gloomy outlook among US and Chinese factory operators

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Manufacturing remains a concern across many of the world’s exporting strongholds, despite stronger than expected economic growth in major economies over the first quarter of 2019. Photo: Xinhua

Published: 7:30pm, 2 May 2019Updated: 11:27pm, 2 May 2019

The surprise uplift in mood caused by better-than-expected first quarter economic growth figures from China, the US and Eurozone proved to be short-lived this week, amid a raft of negative sentiment reported from factories and manufacturers across the China, the US and emerging Asia.

After China’s purchasing managers’ index (PMI) for April slipped back to 50.1 from 50.5 in March, reported on Tuesday, the dampened mood spread to other exporting economies on Wednesday and Thursday, highlighting the continued effect the US-China trade war is having on investment decisions around the globe.

In the US, the Institute for Supply Management (ISM) manufacturing sentiment index, released on Wednesday, fell to a two and a half-year low in April, showing that factory conditions in the US are worsening, despite strong gross domestic product (GDP) growth.

Asia’s exporting powerhouses, meanwhile are experiencing mixed manufacturing conditions.

Thursday’s Nikkei PMI for South Korea, produced by Markit, inched back into expansionary territory in April, rising to 50.2 from 48.8 in March. This indicated a modest improvement in the economy, which posited a surprise 0.3 per cent decline in GDP growth over the first quarter.