Asia's factory activity expands in January on solid global demand

Asia’s factory activity expanded in January as solid global demand lifted export orders, private-sector surveys showed on Monday, offering policymakers some assurance the hit from higher US tariffs has run its course for now.

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Japan and South Korea saw manufacturing activity grow at a multiyear pace as big markets like the US sustained momentum, the surveys showed, brightening prospects for Asia’s export powerhouses.

China's factory activity expanded at a faster pace in January as export orders rebounded, one of the surveys showed, which contrasted with an earlier official report showing activity faltering.

"Exports from most countries have surged in recent months, and we think the near-term outlook for Asia’s export-oriented manufacturing sectors remains favourable,” said Shivaan Tandon, Asia Economist at Capital Economics.

The RatingDog China General Manufacturing Purchasing Managers’ Index (PMI), compiled by SAP Global, rose to 50.3 from 50.1 in December, exceeding the 50-mark that separates growth from contraction and hitting the highest level since October.

The upbeat survey likely reflects China's export drive that offset weak domestic consumption and helped the world’s second-largest economy expand 5.0 per cent last year.

Japan’s S&P PMI rose to 51.5 in January from 50.0 in December, the strongest level since August 2022, driven by robust demand from key markets such as the US and Taiwan.