Several large economies in Asia saw a weakened industry output in the month of September due to drops in demand in China and other biggest markets. In Taiwan and Malaysia, in particular, production decreased. Manufacturing in Japan, Vietnam and India witnessed a slow-paced growth versus August, according to surveys.
Jumping costs of raw materials and vague global prospects affected business sentiment and clear outlook for Asia’s recovery.Recent data on Chinese factories and manufacturing activity shows that the country’s economy is growing slow due to Covid restrictions, which have impacted production and decreased sales. Economic conditions are worsening in China, the U.S. as well as in Europe, which is affecting industrial activity in Asia, said Toru Nishihama, chief economist at Dai-ichi Life Research Institute in Tokyo.Although supply issue may have come to an end, the largest continent has currently faced a drastic decline in global demand, he added.
Last month, the au Jibun Bank Japan Manufacturing Purchasing Managers’ Index (PMI) plummeted to 50.8 from August’s 51.5 in- the lowest growth rate since January 2021.
Japan’s PMI survey stated that recent orders saw the fastest decline in 2 years; production, too, slumped at the fastest within a year as demand from China and other business associates dropped. Last month, Taiwan’s PMI reached 42.2 from 42.7 a month earlier. Similarly, Vietnam’s PMI dropped to 52.5 from 52.7 in August; and Malaysia saw a decline to 49.1 from 50.3. Manufacturing growth rate in India slipped to 3-month low in September as demand and production saw a moderation. This is while inflation eased off and there was a rich business confidence. The Manufacturing Purchasing Managers’ Index, provided by S&P Global, likewise, slipped to 55.1, down from 56.2 in August. Forced by high inflation rates, central banks in the US and Europe have increased interest rates, which have triggered fast slump pressures in global demand.
Downturn in China has also caused vague recovery prospects in Asia. The country is about to ease its strict zero-Covid strategy and numerous analysts predict that China’s economy will see a growth by 3% in 2022, the weakest since 1976 (not considering 2.2% growth following the outbreak).