In August, Asia's factory activity slowed as a resurgence in coronavirus cases disrupted supply lines across the region, prompting fears that the sagging industry may exacerbate the area's economic troubles.
Manufacturing activity in Japan, South Korea, and Taiwan grew at a slower pace in August as chip shortages and factory closures hindered production, according to surveys released on Wednesday. This is yet another indicator of the pandemic's continuing influence.
As a result of COVID-19 control efforts, supply constraints, and high raw material prices, China's industry activity shrank in August for the first time in nearly a year and a half.
The outcome fell far short of market forecasts, highlighting the precarious character of China's recovery, which had aided the global economy's return from the pandemic's doldrums.
“Virus disruptions add to the list of headwinds for the region's producers, which already includes semiconductor shortages and high shipping costs,” said Alex Holmes, Capital Economics emerging Asia economist.
Last month, the Caixin/Markit Manufacturing Purchasing Managers' Index (PMI) dipped to 49.2 from 50.3 in July, breaking through the 50-point threshold that distinguishes expansion from contraction.
“The latest COVID-19 resurgence has posed a serious challenge to the economic normalization process that began in the second quarter of last year,” Wang Zhe, senior economist at Caixin Insight Group, said.
The private sector poll came after the official PMI was released on Tuesday, showing that the index fell in August but remained over 50.
In August, the final au Jibun Bank Japan PMI fell to 52.7 from 53.0 the previous month, with new export orders contracting for the first time since January.
The PMI for August in South Korea was 51.2, down from 53.0 in July but still above the 50-point mark for the 11th month in a row.
According to surveys, Taiwan's PMI fell to 58.5 in August from 59.7 in July, while manufacturing activity in Vietnam fell to 40.2 from 45.1 in July.
Once seen as a driving force for global prosperity, Asian emerging economies are trailing behind established economies in recovering from the pandemic's effects, as delays in vaccine rollouts and an increase in Delta variant cases affect consumer spending and industrial output.
