asia

Asia July industries weaken in battle against COVID-19 Delta variant


SINGAPORE (ICIS)–Manufacturing activities in
southeast Asia took a heavy hit in July amid
various forms of lockdowns in place across
countries in the region, while industry
expansion in China and South Korea slowed down
amid continued supply chain disruptions.

With the region battling against the highly
infectious COVID-19 Delta variant and the
restrictions remaining in place, business
conditions may not improve soon.

Most Asian economies registered lower readings
in July Purchasing Manufacturers’ Index (PMI),
indicating a deterioration in business
operating conditions in the region.

ASEAN plunged deeper into contraction territory
in July as the region tightened restrictions on
people movement and business activities, to
stem the spread of the highly contagious Delta
variant of the coronavirus.

Indonesia – the biggest economy in southeast
Asia – has been on lockdown since early
this month and recorded the worst deterioration
in operating environment for the month among
ASEAN countries.

Myanmar, which has been in turmoil since the
military seized power in February from a
democratically elected government, posted the
lowest reading of 33.5 in July.

The Philippines’ PMI number slipped but
remained above the expansion threshold of 50,
while Singapore had a sharp improvement to post
the highest reading among ASEAN countries at
56.3.

CHINA SLOWDOWN CONCERNS
HEIGHTEN
Continued slowdown in
China’s factory activity is worrying oil
markets, with crude futures trading lower by
more than 1% on Monday.

At 06:00 GMT, Brent crude futures were down
1.27% at $74.48/bbl, while US crude shed 1.1%
at $73.12/bbl.

China’s July manufacturing PMI numbers, based
on official data and
from private media group Caixin, were at their
lowest in more than a year.

See also  Indonesia makes Covid-19 vaccines compulsory, allows private vaccination

China’s official PMI has been declining for
four straight months, partly on power shortages
and drought in some regions.

Recent flooding in
the central Henan province and Typhoon In-Fa in the
eastern parts, as well as the recent COVID-19 outbreak in
Nanjing
had also weighed down on overall
activities in July.

Japan, which is the third-biggest economy in
the world, was a bright spot in July, with a
PMI reading of 53.0, the strongest recorded
since April, according to au Jibun Bank.

The country may get some economic
boost
 from the ongoing Tokyo Olympics
(23 July – 8 August) although the capital and
parts of the country have remained under a
state of emergency amid continuing battle
against COVID-19.

Focus article by Pearl
Bantillo

Visit the ICIS Coronavirus
topic page
for analysis of the
impact on chemical markets and links to latest
news.

(Image: By Saqib Majeed/SOPA
Images/Shutterstock)



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