Hong Kong: The global economy may have stopped its dramatic freefall by now, but data out of the Asia-Pacific region on Wednesday underscored what economists have been cautioning for months: that an actual return to growth is months off, and once here will be feeble.
Orders for machinery in Japan slid 5.4% in April from a month earlier, much more than analysts had expected, government data showed Wednesday.
Orders for such factory equipment are a useful barometer of capital investment plans and for the economy as a whole, and the steep decline in April showed just how fragile and protracted a return to growth will be in Japan.
With the economy, the world’s second largest after the US, mired in its worst recession in decades and demand for Japanese goods abroad being weak, Japanese companies remain reluctant to invest in equipment.
Similarly, statistics published in the Philippines showed the country’s exports in April were 35.2% below a year earlier, and 3.6% below March.
The continued weakness in exports—due to slow demand in Europe and the US—follows similarly disappointing export data for May recently released by South Korea and Taiwan.
By contrast, Australia appears further on the path to recovery, as government stimulus measures and aggressive cuts in interest rates over the past nine months take effect.
Consumer confidence there jumped in June by the most in 22 years after the economy unexpectedly avoided slipping into recession, according to a survey published Wednesday. Similarly, home-loan approvals rose for a seventh consecutive month, helped by government incentives and lower interest rates.
In China, data for May showed consumer prices falling 1.4% from a year earlier, reflecting the decline of lower food and energy prices from their unusually high levels last year. Trade, investment and retail statistics from China, out later this week, will be closely watched. These are expected to show China’s relatively resilient economy is on the path to recovery—though growth there, too, will remain well below the red-hot levels it experienced before the global economic crisis.
Hopes for recovery—even a mild and distant one—have helped stock markets rally since March, interrupted only by muted corrections.
On Wednesday, markets in the Asia-Pacific region were broadly higher. The Nikkei 225 benchmark index in Japan rose 1.3%, The Straits Times in Singapore edged up 0.3% and the Hang Seng Index in Hong Kong climbed 1.4%.
Stocks in Australia, whose commodities-dependent economy also stands to benefit from a recent recovery in the price of oil and other raw materials, also climbed, sending the S&P/ASX index 1.8% higher.
©2009/THE NEW YORK TIMES