Asia’s factory output weakened last month as global recession fears and China’s “zero COVID-19” policy hurt demand, business surveys showed yesterday, adding to persistent supply disruptions and darkening recovery prospects.
Further US interest rate hikes are also expected to force most Asian central banks to prevent sharp capital outflows by tightening their own monetary policies, even if it means cooling already soft economies, analysts say.
Manufacturing activity shrank in Taiwan, South Korea and Malaysia, and expanded at the slowest pace in 21 months in Japan, highlighting the pain from slowing Chinese demand and stubbornly high import costs.
China’s Caixin/S&P Global manufacturing purchasing managers’ index (PMI) stood at 49.2, up from 48.1 in September, but remaining below the 50-point mark that separates growth from contraction.
The private-sector survey was in line with an official PMI survey released on Monday that showed China’s factory activity unexpectedly fell last month.
“Asia is extremely reliant on China. Its zero-COVID policy continues to disrupt supply chains and keep Chinese travelers from returning to Asian tourist destinations. It’s also hurting the region’s exports,” Dai-ichi Life Research Institute lead economist Toru Nishihama said in Tokyo. “Another big risk is the pace of US rate increases. If the [US] Federal Reserve continues to hike rates steadily, that could ignite capital outflows from Asia and hurt exports.”
Japan’s au Jibun Bank Japan Manufacturing PMI fell to 50.7 from September’s 50.8, the weakest growth since January last year.
South Korea’s factory activity shrank for a fourth straight month as orders for exports continued to fall, the PMI showed.
That followed data that showed South Korea’s exports fell for the first time in two years last month, with working-day shipments on average declining 7.9 percent and exports dropping 5.7 percent.
Overall imports gained 9.9 percent, resulting in a trade deficit of US$6.7 billion, the nation’s seventh consecutive monthly shortfall, data showed yesterday.
“Given the country’s open economy and its subsequent reliance on exports, the looming global downturn certainly poses a downside risk for future growth,” S&P Global Market Intelligence economist Laura Denman said on South Korea’s PMI.
Taiwan’s PMI slid to 41.5 from 42.2 in September, while that for Malaysia fell to 48.7 from 49.1, surveys showed.
Factory activity in Indonesia expanded at a slower pace, with the PMI standing at 51.8, down from 53.7 in September.
India was an outlier, with factory activity expanding at a stronger pace as demand remained solid.
PMI was at 55.3, up from 55.1 in September and continuing to stay above the long-run average of 53.7, S&P said.
“Manufacturing employment increased at a marked rate that was one of the strongest since data collection started in March 2005,” as capacity-constrained factories were forced to meet demand for goods by hiring more, the agency said.
Additional reporting by Bloomberg
SEMICONDUCTORS: The German laser and plasma generator company will expand its local services as its specialized offerings support Taiwan’s semiconductor industries Trumpf SE + Co KG, a global leader in supplying laser technology and plasma generators used in chip production, is expanding its investments in Taiwan in an effort to deeply integrate into the global semiconductor supply chain in the pursuit of growth. The company, headquartered in Ditzingen, Germany, has invested significantly in a newly inaugurated regional technical center for plasma generators in Taoyuan, its latest expansion in Taiwan after being engaged in various industries for more than 25 years. The center, the first of its kind Trumpf built outside Germany, aims to serve customers from Taiwan, Japan, Southeast Asia and South Korea,
Gasoline and diesel prices at domestic fuel stations are to fall NT$0.2 per liter this week, down for a second consecutive week, CPC Corp, Taiwan (台灣中油) and Formosa Petrochemical Corp (台塑石化) announced yesterday. Effective today, gasoline prices at CPC and Formosa stations are to drop to NT$26.4, NT$27.9 and NT$29.9 per liter for 92, 95 and 98-octane unleaded gasoline respectively, the companies said in separate statements. The price of premium diesel is to fall to NT$24.8 per liter at CPC stations and NT$24.6 at Formosa pumps, they said. The price adjustments came even as international crude oil prices rose last week, as traders
Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), which supplies advanced chips to Nvidia Corp and Apple Inc, yesterday reported NT$1.046 trillion (US$33.1 billion) in revenue for last quarter, driven by constantly strong demand for artificial intelligence (AI) chips, falling in the upper end of its forecast. Based on TSMC’s financial guidance, revenue would expand about 22 percent sequentially to the range from US$32.2 billion to US$33.4 billion during the final quarter of 2024, it told investors in October last year. Last year in total, revenue jumped 31.61 percent to NT$3.81 trillion, compared with NT$2.89 trillion generated in the year before, according to
PRECEDENTED TIMES: In news that surely does not shock, AI and tech exports drove a banner for exports last year as Taiwan’s economic growth experienced a flood tide Taiwan’s exports delivered a blockbuster finish to last year with last month’s shipments rising at the second-highest pace on record as demand for artificial intelligence (AI) hardware and advanced computing remained strong, the Ministry of Finance said yesterday. Exports surged 43.4 percent from a year earlier to US$62.48 billion last month, extending growth to 26 consecutive months. Imports climbed 14.9 percent to US$43.04 billion, the second-highest monthly level historically, resulting in a trade surplus of US$19.43 billion — more than double that of the year before. Department of Statistics Director-General Beatrice Tsai (蔡美娜) described the performance as “surprisingly outstanding,” forecasting export growth
RSS