Shortages, Shipments and Closures Hit Asian Factory Production | News, Sports, Jobs
Shortages of electricity, computer chips and other parts, skyrocketing shipping costs and factory closures to fight the pandemic are wreaking havoc in Asian economies.
Data released Thursday showed output at Japanese factories slowing while China’s manufacturing outlook weakened.
The Japanese company Suzuki Motor Corp. became the latest automaker to idle its production lines for a few extra days due to component shortages.
As Japan and some other countries begin to ease emergency measures to curb the spread of the coronavirus, others must reimpose such precautions, adding to uncertainty over regional and global growth prospects.
Production at factories in Japan fell 3.2% in August from the previous month, as pandemic-related closures hit manufacturers across Asia. This follows a 1.5% drop in July.
Auto makers and producers of computer products and other electrical machinery have been hit the hardest, the government reported.
Suzuki said it plans to suspend operations at one factory in central Japan for three more days and do the same two days at another factory.
Other automakers have also slowed down operations, citing shortages of computer chips and other parts.
Retail sales fell 4.1% much worse than expected from the previous month due to weak demand for clothing and appliances.
Although there are signs of improvement in parts of Asia, “Further peaks of new daily cases in some countries and relatively slow progress in vaccination rollout in Southeast Asia mean that risks of shortages of semiconductors and other components could persist for an extended period.” , Harumi Taguchi of IHS Markit said in a comment.
Another sign of slowing activity, an official survey of factory managers showed a slowdown in Chinese manufacturing in August.
The Manufacturing Purchasing Managers Index, or PMI, fell from 50.1 in August to 49.6 in September on a scale of 0 to 100, where 50 marks the break between expansion and contraction.
The investigation was carried out before power shortages began to cause factories in parts of China to shut down.
The lowest readings were in energy-intensive areas such as chemicals and metals, Capital Economics’ Julian Evans-Pritchard said in a report.
“Survey respondents noted that material shortages and transportation delays still hampered production,” he said.
The growing demand for computers and other equipment for remote working has strained the supply of the microchips that run them.
Shortages of shipping containers and occasional port closures due to COVID-19 outbreaks have also caused bottlenecks in global supply chains.
“The ports of China and Southeast Asia are still suffering the consequences of these earlier closures, with record queues of ships awaiting unloading,” Rabobank said in a report on the shipping industry.
He estimated that 10% of the world’s container capacity was waiting offshore for unloading.