Asia factory output weak; India defies with rise

Mon Jan 2, 2012 6:38am EST
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By Tony Munroe

MUMBAI (Reuters) - Asian factory output remained weak in December, with Chinese manufacturers narrowly avoiding contraction and South Korea's industrial production shrinking the most in almost three years, while Europe data this week is expected to point to a recession.

India, however, saw strong factory activity in December that defied recent weakness in Asia's third-largest economy.

Meanwhile, housing and jobs data from the United States last week showed the world's largest economy gaining momentum heading into the New Year.

Export-reliant Taiwan saw its manufacturing sector contract for the seventh straight month, according to the HSBC Taiwan Purchasing Managers' Index for December, but the rate of decline slowed.

"Although production and new business inflows are still declining, the pace of deterioration eased across the board for the second straight month," HSBC economist Donna Kwok said of the Taiwan data on Monday.

"Half a year of inventory de-stocking means that a small boost for production could be around the corner soon," she said.

Worries have grown that China, the world's second-largest economy, is headed for sharply slower growth, undermining its ability to offset looming recession in debt-laden Europe and an uncertain U.S. recovery.

China's official purchasing managers' index, released Sunday, edged up to 50.3 in December from 49 in November.   Continued...