India experienced a rapid increase in output in September according to HIS Markit. September appeared to be a robust month for output as COVID cases began to trend lower. COVID cases are now declining in India despite the massive spread throughout Europe and the United States. Despite the rise in output, oil prices around the globe are on the decline which tells you that there is concern about global economic growth.

The Spread of COVID

The trend in the spread of COVID cases is declining in India which is a site for soar eyes. This is not the case in Europe and the United States. India has reported 48,648 new coronavirus cases, continuing a downward trend in infections. India has experienced more than 8 million COVID cases and is only second behind the US as the most cases globally. The Health Ministry also reported 563 new fatalities on the last trading day in October which brought the total death toll to 121,090.

The downward trend in the spread of the virus in India has now been more than 1-month. According to the Health Ministry, India has 594,386 active cases, which suggests that more people are recovering than those who are testing positive for the virus.The downward trend in the spread of the virus in India has now been more than 1-month. According to the Health Ministry, India has 594,386 active cases, which suggests that more people are recovering than those who are testing positive for the virus.

While the trend in India has been downward sloping this has not been the case for Europe and the United States. On the last trading day of October, the United States saw more than 98-thousand cases. On the first day of November at least 427 new coronavirus deaths and 74,113 new cases were reported in the United States. Over the past week, there have been an average of 82,812 cases per day, an increase of 45 percent from the average two weeks earlier. This is an upward sloping trend and does not bode well for the US economy. On the first trading day of November, more than 9,282,300 people in the United States have been infected with the coronavirus and at least 230,900 have died.

Manufacturing is on the Rise

Asian manufacturing rebounded in October reflecting solid output. The Indian Nikkei Manufacturing Purchasing Managers' Index, rose to 58.9 in October from September's 56.8 according to IHS Markit. The reading was the highest since May 2010 moving further into expansion territory above the boom bust level of 50. This was the 3rd consecutive month that the reading was above 50.

China also experienced solid growth. The Caixin China manufacturing PMI came in at 53.6, compared to expectations that it would rise to 53.0 in October, up from 53.0 in September. A weaker reading in the new export orders shows a decline in external demand. October’s PMI reading was the highest since January 2011.

The Bottom Line

The upshot is that an economic rebound is occurring in Asia as countries get a hold of the spread of COVID-19. The downtrend in the spread of the Pandemic in India has been a welcome sign and has allow the country to experience robust manufacturing output. This appears to be the case in China as well. What is also happening as that consumers of Asian output outside of Asia are experiencing a spread of the virus and are likely to see a slowdown in consumption. The spread in Europe remains robust as the UK, Germany and France are headed for lockdowns. In the US the spread reached a all-time high in the last week of October, with nearly 100-thousand cases per day. The divergence might continue until Europe and the US get a handle of the spread of the pandemic.