Asia Plants have Mixed Performance, Pandemic Impact Lingers

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Manufacturing in China and Japan suffered in January amid a resurgence in coronavirus infections, while South Korea and Taiwan saw improvements, underscoring the fragile and uneven nature of the regions economic recovery.

Factory activity quickened in major chip exporters South Korea and Taiwan, as they benefited from continued brisk demand for semiconductors crucial to workfromhome IT goods.

But Chinas manufacturing activity expanded at the slowest pace in seven months in January, weighed down by falling export orders.

Japan also saw factory activity slip back into contraction as a new state of emergency, rolled out in January, hit operating conditions, PMI data showed on Monday.

PMI readings for Asia suggest that manufacturing sectors improved further in most places. Buoyant global demand for electronics should continue to support the sector for at least the next few months, said Alex Holmes, emerging Asia economist at Capital Economics.

Takeshi Okuwaki, an economist at Daiichi Life Research Institute in Tokyo, said Japanese manufacturers may slash output as the state of emergency will unavoidably hurt the economy.

A shortage of chip supply will take time to fix, which will also weigh on Japans automobile production, he said.

Chinas CaixinMarkit Manufacturing Purchasing Managers Index PMI dropped to 51.5 last month, its lowest level since June last year and easing from Decembers reading of 53.0.

Although it remains above the 50 mark that separates growth from…

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