Following the pandemic, manufacturers in the two largest economies in Asia are faring quite differently.
According to official data, factory activity in China increased last month at the quickest rate in more than a decade.
Yet, manufacturing activity in Japan contracted at the quickest rate in more than two years in February.
Companies all over the world are weighing the pros and cons of reopening as Covid rules loosen up against rising prices for everything from energy to labor costs.
China’s National Bureau of Statistics reports that the manufacturing purchasing managers’ index (PMI) increased to 52.6 from 50.1 in January. Since April 2012, it was the highest monthly reading.
PMIs are indicators of economic trends that give businesses, governments, central banks, and investors crucial knowledge about the state of the economy today and in the future.
The PMI is displayed as a number between 0 and 100. A rating over 50 indicates an increase in activity from the previous month. A value less than 50 denotes contraction. The amount of change increases in direct proportion to how far the number is from 50.
Although the stringent coronavirus precautions in the second-largest economy in the world were relaxed late last year, China’s performance was significantly better than anticipated.