Asian manufacturing firms show mixed economy performance as COVID-19 pandemic cases soar
While some Asian manufacturing firms have shown good recovery, others have declined. Japan has seen some drawbacks in production rate, while Taiwan and Korea are promising.
China and Japan have a negative economy index, as Taiwan firms show improvements
Manufacturing companies in Japan and China have been having a negative economy index as Taiwan and South Korea saw slight improvements in manufacturing revenues.
This is good news for the Asian tigers as the flexible and fragile nature of their economies is at risk as the pandemic continues. Major factory operations will increases in top chip exporters (Taiwan and South Korea) as they continue to benefit from an increase in demand for semi-conductors which are crucial for remote workers'
IT appliances. However, China manufacturers saw their activity expand at a slow rate for over six months, which has weighed negatively on their international orders. A top Asian country, Japan saw manufacturing activity contract as the government introduces a fresh lockdown to stem the tide of coronavirus.
According to data by PMI,
'' Manufacturers may reduce production as these new states of emergency by Japan will negatively affect the economy '', a statement credited to Takeshi Okuwaki, a top economist at DRI in Japan.
'' A fall is expected in chip supply which will take some time to fix. This decline in Japan car manufacturing will weigh adversely on the sector '' He stated.
China's manufacturer's index shows a decline
China's manufacturing for Caixin/Markit purchasing managers index declined to 52 % in January, which is the lowest since July 2021. Although it is still above 50%, it is forecast that it will increase before the second quarter of the year. How the new lockdown restrictions will affect this market forecast is fuzzy.
This research tallies with Beijing PMI releases which shows that manufacturing recovery activity is imminent due to dwindling COVID-19 cases in China. Unfortunately for Japan au Jibun Bank, its PMI fell to 49.6 in January, a decline from 50.1 in December.