India
India's manufacturing grew at the slowest pace in four months in January as weakening consumer demand in the U.S. hurt exports of textiles and auto parts.
ABN Amro Bank NV's purchasing managers' index fell to 60.7 last month, the lowest level since September, from 61.9 in December, according to a report released today. A reading above 50 indicates factory output gained.
Orders for merchandise exports, which make up about 15 percent of India's $906 billion economy, have been “sliding'' on the slowdown in the U.S., the nation's biggest overseas market, ABN said. Manufacturing found support in domestic demand as jobs grew at the fastest pace in 25 months in January, the bank said.
“India's trade will weaken considerably because of the economic turmoil in the U.S.,'' said D.H. Pai Panandiker, president at RPG Foundation, an economic policy group in New Delhi. “The economy is still relatively strong because local demand is rising.''
Manufacturing activity in China, the world's fastest- growing major economy, also cooled in January, according to two surveys of purchasing managers payday advance.
China's overseas shipments grew at the slowest pace in two years in December, indicating recent yuan gains, the cooling global expansion and cuts to some export-tax incentives are beginning to bite.
Export Growth
Growth in exports, which account for 40 percent of India's manufacturing, have slowed in the current financial year. The U.S. accounts for about a fifth of India's shipments overseas.
Exports in the eight months ended Nov. 30 rose 22 percent compared with 30 percent in the same period a year before.
The U.S. economy grew 0.6 percent last quarter, less than economists' forecast as housing sank deeper into recession and consumer spending cooled.
“External demand has been slowing while domestic demand remains strong in India,'' said Gaurav Kapur, senior economist at ABN Amro in Mumbai. “Firms recruited additional staff in anticipation of further growth of new business.''