share this article!

3 Minutes to Read TOKYO, Japan (Reuters) – According to surveys released on Thursday, Asia’s manufacturing activity slowed in June as some countries grappled with increased input costs and the reinstatement of restraints to tackle a new outbreak of coronavirus illnesses. On April 22, 2021, workers at VinFast’s plant in Hai Phong City, Vietnam. The photo was taken on April 22, 2021. Thanh Hue/Thanh Hue/Thanh Hue/Thanh Hue/Thanh Hue/Than Vietnam and Malaysia took the brunt of the damage. Manufacturing activity in those countries fell in June as a result of tighter coronavirus restrictions, casting doubt on the region’s ability to recover from the pandemic. “The June PMI data clearly show the impact of the latest wave of the COVID-19 pandemic on the Vietnamese manufacturing sector,” said Andrew Harker, Economics Director at IHS Markit. “Company shutdowns in areas facing restrictions led to sharp reductions in output and new orders across the sector as a whole.” “While less severe than following the pandemic’s emergence in early 2020, the drop in manufacturing output in June was greater than anything witnessed before COVID-19 since the survey began more than a decade ago.” According to a private survey, China’s manufacturing activity slowed in June, with output growth falling to its lowest level in 15 months, matching an official survey showing a drop in activity to a four-month low. Higher raw material costs and a shortage of semiconductor chips hurt Asia’s export powerhouses, including Japan, which saw factory activity expand at the slowest pace in four months in June. South Korea fared better, with industrial activity increasing for the ninth month in a row in June, despite record input and output price increases putting manufacturers under pressure. “Manufacturers were progressively expressing concern that significant supply chain disruption was beginning to affect activity,” Usamah Bhatti, an economist at IHS Markit, said. Vietnam’s PMI fell to 44.1 in June from 53.1 in May, the largest drop in business conditions in over a year and a drop below the 50-point threshold that distinguishes expansion from contraction. Malaysia’s PMI dropped from 51.3 in May to 39.9 in June, as further COVID restrictions weighed on both external and domestic demand. Taiwan’s PMI likewise dropped to 57.6 from 62.0. As delays in vaccine rollouts harm domestic demand and countries depending on tourists, Asia’s emerging economies are trailing behind established economies in recovering from the pandemic’s pain. On a seasonally adjusted basis, the final au Jibun Bank Japan Manufacturing PMI fell to 52.4 in June from 53.0 the previous month, marking the lowest reading since February. The PMI in South Korea rose to 53.9 in June from 53.7 in May, but the sub-index for input prices hit a new high, indicating that enterprises are feeling the pinch from rising raw material costs. Leika Kihara contributed reporting, while Ana Nicolaci da Costa edited the piece./nRead More

share this article!