Asia’s manufacturing managers are seeing stumbles in the region’s economic recovery as the COVID-19 pandemic continues to weigh on output and vaccination lags other regions.
Malaysia’s manufacturing purchasing managers’ index (PMI) declined to 39.9 last month, its lowest in more than a year, from 51.3.
Vietnam and India, which have been battling a recent resurgence of the virus, slipped below the 50 level that separates expansion and contraction.
“The recent rise in COVID-19 infections and associated containment measures once again dampened demand, stymied production and disrupted supply chains” in Malaysia, IHS Markit chief business economist Chris Williamson said. “Companies grew more concerned about the potential impact of further virus waves.”
However, Taiwan and South Korea — export powerhouses that continue to benefit from the boom in the electronics cycle and surging demand for semiconductors — remained well into expansion territory, at 57.6 and 53.9 respectively.
Asia’s export engines are scrambling to minimize disruptions to production as the virus flares up in parts of the region, including recent surges in Malaysia, Indonesia and Vietnam.
Global trade has remained a tailwind for economic growth, even as shipping costs remain elevated.
China’s relatively steady expansion is a boon for the rest of Asia, much of which relies on the world’s second-largest economy as its top trading partner.
The Caixin Media and IHS Markit manufacturing purchasing managers’ index for China eased to 51.3 from 52, a press release yesterday morning showed.
The gauge has been in expansion since May last year.
The official purchasing managers’ index for manufacturing was little changed at 50.9 last month, marking a 16th straight month of expansion, the Chinese National Bureau of Statistics said on Wednesday.
The non-manufacturing gauge, which measures activity in the construction and services sectors, decreased to 53.5 from 55.2, largely due to COVID-19 outbreaks in parts of the country.
Exports from South Korea, a bellwether for global trade, rose more than expected last month, government data showed yesterday, continuing a rally that has officials expecting shipments to reach record highs this year.
“There is a lot of investment currently under way to address the global shortfall of supply relative to the demand for semiconductors,” including around US-China technology conflicts, Rob Carnell, head of Asia-Pacific research at ING Groep in Singapore, said in a report on Wednesday.
“Extra supply will not come onstream quickly,” even as electronics demand remains strong, Carnell said.
In Japan, where the au Jibun Bank and IHS Markit PMI eased to 52.4 from 53 in May, businesses have grown more upbeat on the outlook, with sentiment at the strongest level since the series started in July 2012.
That matches the Bank of Japan’s Tankan survey out earlier yesterday, which showed confidence among Japan’s large manufacturers improving for a fourth straight quarter to its highest level since 2018, even as virus restrictions remain in place.
The Tankan continued to show a sharp divide between Japan’s service companies and its manufacturers.
Exporters are benefiting from a global recovery and weakness in the yen, while consumer-oriented businesses have been casualties of the nation’s drawn-out fight against the virus.
MULTIFACETED: A task force has analyzed possible scenarios and created responses to assist domestic industries in dealing with US tariffs, the economics minister said The Executive Yuan is tomorrow to announce countermeasures to US President Donald Trump’s planned reciprocal tariffs, although the details of the plan would not be made public until Monday next week, Minister of Economic Affairs J.W. Kuo (郭智輝) said yesterday. The Cabinet established an economic and trade task force in November last year to deal with US trade and tariff related issues, Kuo told reporters outside the legislature in Taipei. The task force has been analyzing and evaluating all kinds of scenarios to identify suitable responses and determine how best to assist domestic industries in managing the effects of Trump’s tariffs, he
TIGHT-LIPPED: UMC said it had no merger plans at the moment, after Nikkei Asia reported that the firm and GlobalFoundries were considering restarting merger talks United Microelectronics Corp (UMC, 聯電), the world’s No. 4 contract chipmaker, yesterday launched a new US$5 billion 12-inch chip factory in Singapore as part of its latest effort to diversify its manufacturing footprint amid growing geopolitical risks. The new factory, adjacent to UMC’s existing Singapore fab in the Pasir Res Wafer Fab Park, is scheduled to enter volume production next year, utilizing mature 22-nanometer and 28-nanometer process technologies, UMC said in a statement. The company plans to invest US$5 billion during the first phase of the new fab, which would have an installed capacity of 30,000 12-inch wafers per month, it said. The
Taiwan’s official purchasing managers’ index (PMI) last month rose 0.2 percentage points to 54.2, in a second consecutive month of expansion, thanks to front-loading demand intended to avoid potential US tariff hikes, the Chung-Hua Institution for Economic Research (CIER, 中華經濟研究院) said yesterday. While short-term demand appeared robust, uncertainties rose due to US President Donald Trump’s unpredictable trade policy, CIER president Lien Hsien-ming (連賢明) told a news conference in Taipei. Taiwan’s economy this year would be characterized by high-level fluctuations and the volatility would be wilder than most expect, Lien said Demand for electronics, particularly semiconductors, continues to benefit from US technology giants’ effort
‘SWASTICAR’: Tesla CEO Elon Musk’s close association with Donald Trump has prompted opponents to brand him a ‘Nazi’ and resulted in a dramatic drop in sales Demonstrators descended on Tesla Inc dealerships across the US, and in Europe and Canada on Saturday to protest company chief Elon Musk, who has amassed extraordinary power as a top adviser to US President Donald Trump. Waving signs with messages such as “Musk is stealing our money” and “Reclaim our country,” the protests largely took place peacefully following fiery episodes of vandalism on Tesla vehicles, dealerships and other facilities in recent weeks that US officials have denounced as terrorism. Hundreds rallied on Saturday outside the Tesla dealership in Manhattan. Some blasted Musk, the world’s richest man, while others demanded the shuttering of his