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