Asian factories shake off supply headaches, but Omicron poses new risks

File Photo: Employees measure a newly manufactured ball mill machine at a factory in Nantong, Jiangsu Province, China on June 28, 2019. REUTERS / Stringer

December 1, 2021

Reika Kihara

Tokyo (Reuters) – In November, factory activity in Asia expanded as supply bottlenecks were resolved, but rising input costs and new weaknesses in China helped to recover early and sustainably from a pandemic paralysis. The outlook has weakened.

The newly detected Omicron coronavirus mutant is new to regional policy makers who are already tackling the challenge of getting the economy out of the downturn while trying to curb inflation amid rising commodity costs and component shortages. It has emerged as a concern.

Factory activity in China returned to contraction in November, with private Caixin / Markit Manufacturing Purchasing Managers’Index (PMI) showing Wednesday as sluggish demand and rising prices hit manufacturers.

The results of a private survey focusing on coastal SMEs contrast with the results of China’s official PMI on Tuesday, with manufacturing activity rising unexpectedly in November, albeit at a very modest pace. bottom.

Wang Zhe, senior economist at Caixin Insight Group, said in a statement accompanying the data release that “relaxation of supply-side constraints, especially the relaxation of the power crisis, has accelerated the pace of production recovery.”

“But demand was relatively weak and was constrained by the COVID-19 epidemic and rising product prices.”

However, outside of China, PMI is expanding in countries such as Japan, South Korea, Vietnam, and the Philippines, so factory activity appears to be recovering.

Japan’s PMI rose to 54.5 in November, expanding at the fastest pace in almost four years from 53.2 in October.

South Korea’s PMI rose from 50.2 in October to 50.9, above the 50 mark threshold, which indicates that activity has expanded for 14 consecutive months.

However, in South Korea, production has shrunk for the second straight month as Asia’s fourth-largest economy struggles to fully regain momentum in the face of continued supply chain disruptions.

Alex Holmes, an emerging Asian economist, said: Capital economics.

Vietnam’s PMI rose to 52.2 in November and 52.1 in October, while the Philippines’ PMI rose from 51.0 to 51.7.

Taiwan’s manufacturing activity continued to expand in November, but at a slower pace, the index reached 54.9 from 55.2 in October. The situation in Indonesia is similar, with PMI relaxed from 57.2 to 53.9 in October.

The November survey may not reflect the spread of Omicron variants that could put further pressure on the pandemic-confused supply chain, and many countries impose new border controls themselves. Was closed.

(Report by Reika Kihara, edited by Sam Holmes)

Asian factories shake off supply headaches, but Omicron poses new risks

Source link Asian factories shake off supply headaches, but Omicron poses new risks

Back to top button