South Korea and Taiwan witnessed a progression in January even during the on-going corona pandemic, whilst China and Japan met with hardships during the month under review. Production in the South Korea and Taiwanese chip factories gained hugely due to the continued demand for semiconductors being critical for IT for the work-from-home methodology.
Although China’s manufacturing work progressed in January, it was the slowest in seven months mainly due to the decrease in export orders. Since the roll out of the new state of emergency, Japan also witnessed its production in its factories reach low levels and affecting its operations as shown by the PMI data.
“Manufacturers may slash output as the state of emergency will unavoidably hurt the economy,” said Takeshi Okuwaki, an economist at Dai-ichi Life Research Institute in Tokyo. “A shortage of chip supply will take time to fix, which will also weigh on Japan’s automobile production,” he said.
China’s Caixin/Markit Manufacturing Purchasing Managers’ Index (PMI) dropped to 51.5 last month, its lowest level since June last year and easing from December’s reading of 53.0. Although it remains above the 50 mark that separates growth from contraction, the index was below a median market forecast for a reading of 52.7. The survey broadly aligned with Beijing’s official PMI on Sunday, which showed the recovery in factory activity slowing as local COVID-19 cases rose.
Japan’s final au Jibun Bank PMI fell to 49.8 in January from the previous month’s 50.0 reading, as fresh state of emergency measures in areas accounting for 55% of the country’s population hurt employment and output. That was in stark contrast to South Korea, where factory activity rose at its fastest pace in a decade thanks to soaring exports. While South Korea is seeing a slow decline in new cases of corona, the country got affected with its third and powerful wave of the infection this winter.
Whilst the manufacturing industry in the Philippines was subject to an almost halt, the operations in Indonesia grew at a quicker pace in January compared to December 2020. PMI data indicated that manufacturing movements slowed down in Malaysia. PMI further reported that Vietnam’s manufacturing operations were slower on the up-take.
In an effort for factories trying to fulfill overseas orders in the midst of the vicious corona pandemic, the last quarter of 2020 saw China’s economy grow at an unexpected rate of 6.5%. But recovery hopes are being dampened by a sharp increase in COVID-19 cases as authorities race to impose lockdown measures to curb the spread of the virus in the country’s north.
As restrictions and lockdown measures are being imposed by the authorities concerned in a major effort to curtail the spread of the virus in the north of the country, all hopes of recovery seem very bleak with the acute increase in the number of COVID-19 patients.
