Factories in Asia lost momentum in August as resurgence in COVID-19 cases disrupted supply chains across the region.
Manufacturing activity expanded at a slower rate in Taiwan, Japan, Vietnam, and South Korea as chip shortages and factory shutdowns disrupted production. Meanwhile, factory activities in China slipped into contraction for the first time in nearly one and a half years.
“Virus disruptions add to the list of headwinds for the region’s producers, including semiconductor shortages and high shipping costs,” said Alex Holmes, emerging Asia economist at Capital Economics.
Once seen as a driver of global growth, Asian’s emerging economies are lagging advanced economies in recovering from the pandemic’s pain as delays in vaccine rollouts and a spike in Delta variant cases hurt consumption and factory production.
The final au Jibun Bank Japan PMI in August eased to 52.7 from 53.0 in the previous month, posting first contraction since January.
South Korea’s PMI fell from 53.0 in July to 51.2 for August. Taiwan’s PMI eased to 58.5 in August from 59.7 in July, while Vietnam saw its factory activity shrink to 40.2 from 45.1 in July.