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Slowdown in Asian Manufacturing Presents Cost Saving Opportunities

Global Sourcing Giant DirecSource see’s opportunities for its US Customers

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ANNISTON, AL. – Economic conditions in Asia have created a favorable opportunity for US brands looking to expand their production orders for 2012 as costs for some materials and manufacturing processes may be on a short-term decline.

A recent survey of over 800 factories in Asia has discovered a slight downward turn in production. At the same time, material suppliers have been caught by surprise and have excess of materials on hand as they have been forecasting for marginal growth.

“We see this as a temporary downturn in orders coming into Asia, but it creates a short-term advantage for American brands that are looking to increase production and save on certain items,” said Ed Ring, COO of DirecSource, an international trading company that connects brands to a wide network of raw material suppliers and factories in Asia.

The official purchasing managers’ index (PMI) – based on a survey of 820 manufacturers – dropped to 50.4 in October from 51.2 in September, the China Federation of Logistics and Purchasing said in a statement issued this week.

Ring said DirecSource has a network of suppliers and factories throughout Asia that it works with on a daily basis to produce a wide range of hard goods and soft goods and is able to negotiate prices on behalf of its customers resulting in the most competitive prices for its customers.

“Typically, when there is a slowdown like this among factories in China we’re able to help our customers trim costs on some existing product lines and often it presents a window of opportunities for those who are thinking about a product line extension.”

China’s economic growth eased to 9.1 per cent in the third quarter from 9.5 per cent in the second quarter as government efforts to tame inflation, as well as economic turbulence in Europe and the United States, curbed activity.

“The fall in the October PMI indicates that economic growth is likely to slow further in the future,” Zhang Liqun, a government analyst, said in the statement.
Premier Wen Jiabao indicated last week that the government might relax tight credit restrictions as small exporters struggle to pay their bills and falling property sales threaten to drive debt-laden developers to the wall.

In the meantime, according to Ring, there are opportunities for many brands to save some money as factories look to keep their production lines moving.

DirecSource is a Leading Global Supply Chain Solutions Company providing sourcing, manufacturing, logistics, shipping, warehousing and fulfillment services. To learn more about DirecSource please visit or contact Ed Ring at