Business & Investment

Delta Variant, factory activity in Asia hit by rising costs

Reuters

Tokyo — In July, factories in Asia were hit by a rough patch as rising input costs and a new wave of coronavirus infections masked strong global demand and highlighted regional recovery vulnerabilities. ..

Manufacturing activity increased in Japan and South Korea’s largest exporters, but companies suffered supply chain disruptions and raw material shortages, pushing costs up.

Growth in factory activity in China plummeted in July as demand shrank for the first time in more than a year. A private survey showed a slowdown in activity, in close agreement with the official survey released on Saturday.

“Supply bottlenecks remain constrained, but the Purchasing Managers Index (PMI) suggests that demand is also chilling, removing heat from rising prices and focusing on industrial and construction activities. “Julian Evans-Pritchard, Senior China Economist at Capital Economics, said.

In Indonesia, Vietnam and Malaysia, factory activity shrank in July due to recurrence of infectious diseases and tightening of COVID-19 regulations, according to a private survey.

The study highlights the differences emerging throughout the global economy at the pace of recovery from the tensions caused by the pandemic, and the International Monetary Fund has downgraded growth forecasts for emerging Asia this year.

Frederick Neumann, co-head of HSBC’s Asian Economic Studies, said:

“Furthermore, the slump in export momentum, far from a temporary decline, provides hints on what is expected in the coming quarters,” he said, and such uncertainty about the outlook is Asia. He added that it would urge the central bank to maintain loose monetary policy.

China’s Caixin / Markit Manufacturing Purchasing Managers’ Index (PMI) dropped from 51.3 in June to 50.3 in July, hitting its lowest level in 15 months as rising costs clouded the outlook for global manufacturing hubs. I recorded it.

au Jibun Bank’s final PMI rose from 52.4 last month to 53.0 in July, but manufacturers expect input prices to rise at the fastest pace since 2008.

Japan is also facing a surge in Delta anomalies, forcing the government to extend the state of emergency to a wider area until August 31, casting a shadow over the Olympics, from July to September. It shattered expectations for a rapid recovery in growth.

South Korea’s PMI was 53.0 in July, exceeding 50, indicating that activity has expanded for 10 consecutive months. However, the input price sub-index rose to the second highest on record as a sign of tension that companies are feeling from rising raw material costs.

Emphasizing pandemic tensions on emerging Asia, Indonesia’s PMI plummeted from 53.5 in June to 40.1.

According to a July survey by PMI, manufacturing activity has also shrunk in Vietnam and Malaysia.

Relaxing regulations while still working on infectious diseases helped India’s factory activity recover in July as demand surged at home and abroad.

Once regarded as a driving force for global growth, Asian emerging economies have become developed countries in recovering from pandemic pain because delayed vaccine deployments have hurt domestic demand and are dependent on tourism. I’m behind. — — Reika Kihara / Reuters

Delta Variant, factory activity in Asia hit by rising costs

https://www.bworldonline.com/asian-factory-activity-hit-by-rising-costs-delta-variant/ Delta Variant, factory activity in Asia hit by rising costs

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