By Leika Kihara
TOKYO (Reuters) – Asian factories hit a rough patch in July as rising input costs and a new wave of coronavirus infections overshadowed strong global demand, highlighting the fragile nature of the region’s recovery. .
Manufacturing activity increased in the export powers of Japan and South Korea, although companies suffered supply chain disruptions and raw material shortages that raised costs.
China’s manufacturing activity growth slowed sharply in July as demand contracted for the first time in more than a year, a private survey showed, broadly in line with an official survey released Saturday showing a slowdown in activity.
Indonesia, Vietnam and Malaysia saw factory activity slow in July due to a resurgence of infections and tighter COVID-19 restrictions, according to private surveys.
The polls highlight the emerging divergence in the world economy on the pace of recovery from pandemic-induced tensions, prompting the International Monetary Fund to lower this year’s growth forecast for emerging Asia.
“Anecdotal evidence suggested a resurgence of COVID-19 cases in Asia and the ongoing supply chain disruption had led to reduced demand in both domestic and foreign markets,” said Usamah Bhatti, economist at IHS Markit. .
China’s Caixin / Markit Manufacturing Purchasing Managers Index (PMI) fell to 50.3 in July from 51.3 in June, marking the lowest level in 15 months as rising costs clouded the outlook for the manufacturing hub. world.
Au Jibun Bank Japan’s final PMI rose to 53.0 in July from 52.4 in the previous month, although manufacturers saw input prices rise at the fastest pace since 2008.
Japan is also facing a surge in Delta variant cases that forced the government to expand the curbs of the state of emergency to wider areas through Aug. 31, overshadowing the Olympics and dashing hopes of a strong rebound in growth in Japan. July September.
South Korea’s PMI stood at 53.0 in July, staying above the 50 mark, indicating an expansion in activity for the 10th consecutive month. But a sub-index on input prices rose to the second-highest in history, a sign of the strain companies are feeling from rising raw material costs.
Underscoring the pressure of the pandemic in emerging Asia, Indonesia’s PMI plunged to 40.1 in July from 53.5 in June.
Manufacturing activity also contracted in Vietnam and Malaysia, July PMI surveys showed.
Once seen as an engine of global growth, emerging Asian economies are lagging behind advanced economies to recover from the pain of the pandemic, as delays in the launch of vaccines hurt domestic demand and countries that depend on tourism.
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