The data flow has kicked off 2012 with a decidedly positive tone.
According Bloomberg, India's Purchasing Managers' manufacturing Index (PMI) rose to a six month high of 54.2, while China's index was 50.3 points, after a few months below 50 which was a sign that manufacturing was contracting. The non-manufacturing PMI in China jumped to 56.0 points in a clear sign of strength.
The Australian manufacturing PMI data also released this morning was also above 50 hinting that the sector is hanging in there and just might be performing a little better than has been reported.
This is good news. It suggests that the downturn unfolding in China and India since around the middle of 2011 is either not severe as feared or is being arrested. For Australia, these dynamics, if sustained, would be very supportive and may signal that the doldrums from Europe, Japan, the US and many other advanced economies may not be a significant drag on activity. We'll see. Obviously there are still massive concerns about the sustainability of global growth in 2012, but in the Asia Century, the Asian data has kicked off 2012 on a positive note.
It is greatly encouraging to see positive economic news from China and India which will not only help Australia, but could help lift the industrialised world from its funk.
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