Honda ramps up Mexico investment
The central Mexican region known as El Bajío is known as the nation’s colonial heartland, its grain belt and a hotbed of fervent Catholicism. Now Japanese auto production can be added to the list.
While Barack Obama and the Mexican president, Enrique Peña Nieto were talking in Mexico City about jobs, Honda was announcing the creation of 1,500 of them in an $470m transmission plant to be built in Celaya in El Bajío. Continue reading »
CEE PMIs: Czech bad, Poland awful
Terrible news out of Poland on Thursday morning as Polish manufacturing showed signs of a steepening downturn, posting the worst results since the depths of the first wave of the economic crisis in 2009.
April’s purchasing managers index, compiled by Markit Economics for HSBC, hit 46.9, far below analysts’ expectations of 47.8 and the worst since July 2009. PMI figures of less than 50 denote a contraction of manufacturing, and Poland has been posting them for 13 successive months, the grimmest performance in a decade. Continue reading »
Asia PMI scorecard: 3 up, 3 down
First the good news: all six of the Asian purchasing managers’ indices from HSBC/Markit are in positive territory (that is, a score above 50, which separates expansion from contraction).
Now the bad news: three of the six are heading the wrong way. Continue reading »
Indonesia: PMI-happy, for now
While China’s manufacturing indices have been rather depressing of late, Indonesia’s numbers are much healthier.
The PMI score came out at 51.7 in April – up from March, a six-month high, and the second highest in the last few years. So, all good? Continue reading »
Guest post: after the Rana Plaza disaster, Bangladesh needs independent, well-funded safety inspectors
By Ifty Islam of Asian Tiger Capital Partners
The collapse of Rana Plaza, the eight-storey building housing garment factories in Savar, near Dhaka, the capital of Bangladesh, has seen more than 300 killed and over 1200 injured, with many hundreds still missing.
Coming only five months after 111 deaths in an earlier factory fire, the overwhelming sentiment in Bangladesh has gone from shock to moral outrage about the scant regard for human life among the factory owners. There have been violent protests across Dhaka by thousands of enraged garment factory workers. Continue reading »
Mexican labour: cheaper than China
It is no secret that the wage gap between Mexico and China has been narrowing in recent years. While labour costs in Mexico were roughly 200 per cent higher than China’s a decade ago, wage inflation in China and wage stagnation in Mexico have combined to close the gap to nearly zero .
But could labour in Mexico now actually be cheaper than in China? Yes, according to Carlos Capistran, an economist at Bank of America Merrill Lynch. Not only are average hourly manufacturing wages in Mexico now lower than those in China in constant dollar terms, they are 20 per cent less. Continue reading »
Asia PMI scorecard: looking good
Source: HSBC / Markit
After last month’s rather gloomy reading, March’s HSBC/Markit manufacturing indices for Asia have a far more positive hue.
In fact, all 6 countries with data released on Monday were above the 50 mark that separates expansion from contraction – and only India saw a fall in the reading. That’s not bad at all. Continue reading »
Taiwan’s investors in China: insourcing, up to a point
Repatriating manufacturing back from China isn’t only a phenomenon of developed western markets.
Taiwan is home to many of the companies that helped build the Chinese contract manufacturing model and which continue to pour billions into the mainland. Yet Taipei, too, has been rolling out ambitious plans to bring those manufacturers back home. Will it work? Maybe. But as one economist points out, an equally interesting area to track is how Taiwanese companies are changing the way they invest into China. Continue reading »
India: German washing machines… from Chennai
Chennai has received a powerful boost to its claims to be one of India’s most important industrial centres with Germany’s Bosch and Siemens Home Appliances Group (BSH) choosing the city for its Indian first production plant. Continue reading »
In recent years, commentators have cited the strong yen and anaemic domestic growth as key drivers of surging investment by Japanese companies in southeast Asia.
With the yen having weakened by over 10 per cent against the dollar since prime minister Shinzo Abe was elected in December with a mandate to re-inflate the moribund Japanese economy, will the tide of Japanese investment into Indonesia, Myanmar, Thailand and Vietnam recede? Continue reading »
Nigeria wins $1bn General Electric manufacturing investment
General Electric on Thursday announced plans to invest close to $1bn in factories for the energy industry in Nigeria. Speaking at a ceremony in Abuja, GE chairman Jeff Immelt claimed it would create 2,300 jobs in the local economy and make Nigeria a regional manufacturing hub. Continue reading »
China flash PMI – green shoots with sturdy roots?
Another data point out today is undoubtedly going to encourage those hoping to see evidence that the green shoots of China’s economic recovery have sturdy roots.
This month, the HSBC/Markit China flash purchasing managers’ index, a private survey of the health of the manufacturing sector, hit its highest point in two years, as Chinese manufacturers accelerated production and began some restocking. Continue reading »
Renault/Nissan plant, Chennai
Manufacturers in the US, western Europe and Japan – and their political masters - talk of technological changes which might bring back to their shores at least a slice of the production that has gone to Asia.
James Crabtree, the FT’s Mumbai correspondent, believes they might be whistling in the wind. Continue reading »
Indonesia: Nike in low wages row
A 2012 protest over wages
The battle over factory pay in Indonesia is intensifying, with vocal local trade unions joining hands with a US non-governmental organisation to pressure Nike suppliers into paying minimum wages.
A yawning gap is opening up between employers, who argue that hefty minimum wage increases are destroying their profitability, and trade unions, who argue that wages must rise further and employment conditions be improved. Continue reading »
Chart of the week: how important is manufacturing to emerging markets?
For some emerging economies, large energy deposits can provide a fast boost to growth. But to move up towards middle income status or beyond, manufacturing has almost always been a necessary step for EMs to build a modern economy.
So what is the picture of the world’s top manufacturers? Who is the biggest, and which EMs have made the biggest strides? Continue reading »
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