Asian factories shake off supply headaches but Omicron presents new risks
Asian factory activity grew in November as crippling supply bottlenecks eased, but rising input costs and renewed weakness in China dampened the region's prospects for an early, sustained recovery from pandemic paralysis.
The newly detected Omicron coronavirus variant has also emerged as a fresh worry for the region's policymakers, who are already grappling with the challenge of steering their economies out of the doldrums while trying to tame inflation amid rising commodity costs and parts shortages.
China’s factory activity fell back into contraction in November as subdued demand, shrinking employment and elevated prices weighed on manufacturers, a business survey showed on Wednesday.
The Caixin/Markit Manufacturing Purchasing Managers’ Index (PMI) fell to 49.9 in November from 50.6 the month before, versus analyst expectations of 50.5 in a Reuters poll. The 50-mark separates growth from contraction on a monthly basis.
Japan's PMI rose to 54.5 in November, up from 53.2 in October, the fastest pace of expansion in nearly four years.
South Korea's PMI edged up to 50.9 from 50.2 in October, holding above the 50-mark threshold that indicates expansion in activity for a 14th straight month.
India's manufacturing activity grew at the fastest pace in 10 months in November, buoyed by a strong pick-up in demand.
Vietnam's PMI rose to 52.2 in November from 52.1 in October, while that of the Philippines increased to 51.7 from 51.0.
Taiwan's manufacturing activity continued to expand in November but at a slower pace, with the index hitting 54.9 compared with 55.2 in October. The picture was similar for Indonesia, which saw PMI ease to 53.9 from 57.2 in October.
The November surveys likely did not reflect the spread of the Omicron variant that could add further pressure on pandemic-disrupted supply chains, with many countries imposing fresh border controls to seal themselves off.
Reference: Reuters
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