Asia Pacific exports to face continued headwinds

MANILA, Philippines — Exports from Asia Pacific are expected to continue to face headwinds in the near term, with the latest Purchasing Managers’ Index (PMI) surveys showing weak orders, according to S&P Global Market Intelligence.

Rajiv Biswas, chief economist for Asia Pacific at S&P Global Market Intelligence, said there has been a significant slowdown in the region’s exports in recent months after a strong expansion in the first half of the year.

Biswas said latest evidence from the S&P Global PMI surveys for November showed new export orders remain weak across economies in the region, indicating the export sector would continue to be challenged moving forward.

“This reflects slowing growth in the US and EU (European Union) and for Asia-Pacific, excluding mainland China, weak domestic demand in mainland China due to the impact of ongoing COVID-19 restrictions,” he said.

While new orders made with manufacturing firms increased in the Philippines in November, S&P Global said the latest PMI survey showed the domestic market fueled demand as new export orders has been contracting since March.

“The downturn in global electronics demand during 2022 has increasingly been impacting on Asia-Pacific electronics exports,” Biswas said.

He pointed out that electronics manufacturing is a significant part of manufacturing exports for many economies in the region, including the Philippines, Japan, mainland China, South Korea, Malaysia, Singapore, Taiwan, Vietnam, and Thailand.

Latest trade data from the Philippine Statistics Authority showed electronic products continued to be the country’s top export in the January to September period this year, with its earnings amounting to $32.73 billion, 4.1 percent higher than the $31.45 billion in the same period last year.

While merchandise exports are expected to continue to face challenges, Biswas said service exports would improve next year in Asia Pacific economies that had large international tourism revenue prior to the pandemic.

“The reopening of international borders in many Asia Pacific countries during 2022 has already allowed a gradual restart of international tourism, but momentum is expected to build significantly during 2023,” he said.

He added these economies could benefit should China relax its COVID-19 restrictions.

“If mainland China eases its own border restrictions for international travel during 2023, this also could provide a further large boost to Asia Pacific tourism exports. Chinese tourist visitors had become a key part of the international tourism market for many Asia Pacific economies, including South Korea, Japan, Thailand, Philippines, Malaysia and Singapore,” Biswas said.