Asia basking in a sweet export-led economic bounce

Amidst slowdown in the domestic market.

According to Bank of Singapore's Economics Research, Asian economies are showing signs of benefitting from the pick-up in growth in the developed world.

This will help to offset a domestic slowdown. Growth in much of the region is expected to be similar to 2013, but the balance is shifting to a greater contribution from exports and less from domestic demand.

Here's more:

We have a useful time series of manufacturing sector PMI readings for the Asian NIEs (Hong Kong, Korea, Singapore and Taiwan). These should reflect the same external demand conditions that are facing other economies in the region as well, which implies a region-wide pick-up.

Tthe PMI for the Asian NIEs has risen steadily since July 2013 and is at the strongest level in almost three years. These are all open, trade-oriented economies (and we can see nothing in domestic economy that would have produced such an improvement in the corporate sector).

It is probably export demand that has driven the gains. An export-led improvement is also consistent with the observed improvement in growth in the developed markets.

Moreover, we can already see it in the trade data. Unsurprisingly the swing has been the greatest in exports to Europe where the economy came out of an 18-month recession in mid-2013.