Asia hit by virus, Europe fights supply issues

Asia’s manufacturers are seeing the area’s economic recovery stumble as the pandemic weighs on output and vaccinations lag other regions, increasing their reliance on exports to the rest of the world.At the same time, Europe’s booming economy is battling a supply squeeze that is pushing up prices and running down stockpiles.Still, factories reported that they are being held back by supply constraints and were forced to dip into inventories. Producers raised their goods prices by the most in record. Williamson said issues such as port congestion and a lack of shipping containers should soon fade.The relatively steady expansion in China is also a boon for the rest of Asia, much of which relies on it as its top trading partner. The Caixin Media and IHS Markit manufacturing purchasing managers’ index for China eased to 51.3 from 52, according to a release Thursday morning. The gauge has been in expansion since May 2020.China’s official manufacturing purchasing managers’ index was little changed at 50.9 in June, marking a 16th straight month of expansion, the National Bureau of Statistics said Wednesday. The non-manufacturing gauge, which measures activity in the construction and services sectors, decreased to 53.5 from 55.2, largely due to virus outbreaks in parts of the country.Exports from South Korea, a bellwether for global trade, rose more than expected in June, government data Thursday showed, continuing a rally that has officials expecting shipments to reach record highs this year.“There is a lot of investment currently underway to address the global shortfall of supply relative to the demand for semiconductors,” including around U.S.-China technology conflicts, Rob Carnell, head of Asia-Pacific research at ING Groep in Singapore, said in a report Wednesday. “Extra supply will not come on-stream quickly,” even as electronics demand remains strong.In Japan, where the au Jibun Bank and IHS Markit PMI eased to 52.4 from 53 in May, businesses have grown more upbeat on the outlook, with sentiment at the strongest level since the series started in July 2012.That matches the Bank of Japan’s Tankan survey out earlier Thursday, which showed confidence among Japan’s large manufacturers improving for a fourth straight quarter to its highest level since 2018, even as virus restrictions remain in place.(With assistance from Anirban Nag)

from Economic Times https://ift.tt/3hb517R