Manufacturing activity in Asia outside China stabilized last month amid easing lockdown and border restrictions, setting the sector on course to face a possible new challenge from the Omicron variant of SARS-CoV-2.
Manufacturing purchasing managers’ indices (PMI) across Southeast Asia showed continued positivity, data released yesterday by IHS Markit showed.
Malaysia, Vietnam and the Philippines all saw rises in their PMIs, while Thailand’s saw a slight decline to 50.6, albeit still above the 50 reading that separates expansion from contraction.
Indonesia’s PMI saw a third month of expansion, but eased to 53.9 from 57.2 last month. The index rose to 57.6 in India — the highest reading since January.
In northern Asia, manufacturing activity in Taiwan and trade bellwether South Korea held in expansionary territory, while Japan’s PMI rose to 54.5, its highest since January 2018.
Meanwhile, separate data from South Korea out yesterday showed that exports last month rose more than expected and are headed for an annual record, buoyed by year-end holiday demand and higher product prices, even as supply chain bottlenecks continued to pressure manufacturers.
Exports rose 32.1 percent last month from a year earlier to a record US$60.4 billion, South Korean Ministry of Trade, Industry and Energy data showed.
Overseas shipments are on track to reach the highest annual value in the country’s trade history, the ministry said.
In Japan, a Ministry of Finance report released yesterday showed that Japanese firms cut investment last quarter for the first time in six months, as supply shortages hit activity and businesses grew cautious during a summer spike of COVID-19 that triggered emergency restrictions.
Capital expenditures, excluding those for software, declined 1.1 percent in the three months through September, compared with the prior quarter, the report said.
Both manufacturers and service firms cut investment, with spending by goods makers falling 1.5 percent amid supply chain snags.
News of the Omicron variant is seen as a potential threat to industrial production across the region after the Delta variant forced factories to shut and further snarled supply chains.
Factories across Southeast Asia especially had been on a recovery path, as loosened movement restrictions allowed production to catch up ahead of the crucial year-end holiday season.
The regional figures came a day after data showed China’s factory activity improved last month, as the impact of a power crunch subsided and more working days in the month helped boost output.
China’s official manufacturing PMI rose to 50.1, the first time in three months it exceeds the 50 mark. The non-manufacturing gauge, which measures activity in the construction and services sectors, fell slightly to 52.3.
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