Tokyo, Dec. 1 (BNA): Factory output fell broadly across Asia in November, as slowing global demand and uncertainty about the fallout from China’s strict coronavirus lockdown weighed on business sentiment.
According to Reuters, the results highlighted a bleak economic outlook for Asia for 2023, as lockdowns disrupt international supplies and raise fears of a further downturn in its economy, the world’s second-largest.
Amid the pandemic restrictions, China’s factory activity contracted in November, a special survey showed on Thursday. The result implied weaker employment and economic growth in the fourth quarter.
Surveys showed that manufacturing activity also contracted in export-dependent economies, including Japan and South Korea, and in emerging countries, such as Vietnam, underlining the growing damage from weak global demand and rising input costs.
“Cool market conditions, persistent cost pressures and weak underlying demand, both domestic and international, were pivotal factors contributing to the declines,” said economist Laura Denman of S&P Global Market Intelligence, which compiles the survey for Japan.
China’s global Caixin/S&P manufacturing PMI settled at 49.4 in November, up from 49.2 the previous month but still below the 50 mark, which separates growth from contraction. It has now been below 50 for four straight months.
The number came after downbeat data in an official survey on Wednesday that showed manufacturing activity hit a seven-month low in November.
Japan’s au Jibun PMI also fell to 49.0 in November from 50.7 in October. This was the first contraction since November 2020.
South Korea’s factory activity contracted for the fifth consecutive month in November, but the contraction eased slightly, suggesting the worst is over for companies.
Separate data on Thursday showed that South Korea’s exports in November suffered their sharpest annual decline in two-and-a-half years, weighed down by calming global demand in key markets led by China and a slump in the semiconductor industry.
Lockdowns in China have affected production at a factory there that is Apple Inc.’s largest iPhone maker. They also sparked rare street protests in several cities.
The impact of China’s problems was felt widely across Asia. The Taiwan PMI settled at 41.6 in November, up slightly from 41.5 in October but still well below the 50 level.
Private surveys showed that the Vietnamese PMI fell to 47.4 in November from 50.6 in October, while that of Indonesia fell to 50.3 from 51.8.
FAE