1. Europe fights supply squeeze
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 the prices of their goods by the most in the 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
2. Asia factories see momentum weaken on rising costs, new COVID curbs
Asia's factory activity saw momentum weaken in June as some countries struggled with rising input costs and the reintroduction of curbs to combat a new wave of coronavirus infections, surveys showed on Thursday.
Vietnam and Malaysia were particularly hard hit. Manufacturing activity shrank in those countries in June due to stricter coronavirus restrictions, clouding the outlook for a region lagging western economies in recovering from the pandemic.
"The June PMI data show clearly the impact of the latest wave of the COVID-19 pandemic on the Vietnamese manufacturing sector, with company shutdowns in areas facing restrictions leading to sharp reductions in output and new orders across the sector as a whole," said Andrew Harker, Economics Director at IHS Markit.
3. Asia's factories sustain expansion, supply chain woes cloud outlook
Asia's factory activity continued to expand in May thanks to an ongoing recovery in global demand, surveys showed on Tuesday, though rising raw material costs and supply chain constraints clouded the outlook.
A spike in COVID-19 infections in countries like Taiwan and Vietnam could disrupt semiconductor output and supply chains, posing a headache for manufacturers and weighing on Asia's export-driven recovery, analysts say.
Japan and South Korea saw an expansion in factory activity moderate in May, purchasing managers' indexes (PMI) showed on Tuesday, underscoring the fragile nature of their recoveries.
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