Shortages, shipping, shutdowns hit Asian factory output

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Asian economies are being hit hard by power shortages, computer chips and other parts, rising shipping costs and factory closures to fight the pandemic.

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Asian economies are being hit hard by power shortages, computer chips and other parts, rising shipping costs and factory closures to fight the pandemic.

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Japan’s Suzuki Motor Corp. has become the latest automaker to suspend production lines for a few extra days due to component shortages.

Factory output in Japan fell 3.2% in August from a month earlier, as pandemic-related shutdowns affected manufacturers across Asia. This was followed by a 1.5% decline in July.

The government pointed out that automakers and manufacturers of IT products and other electrical machinery were the hardest hit.

Suzuki said it expected to suspend operations at one factory in central Japan for an additional three days and another for two days.

Other automakers have also slowed operations, citing lack of computer chips and other parts.

Retail sales tumbled 4.1 per cent from a month earlier, driven by weak demand for clothing and equipment.

While there are signs of improvement in parts of Asia, “fresh peaks for new daily cases in some countries and relatively slow progress in vaccination rollouts in Southeast Asia mean that semiconductors and other components risk shortages for an extended period.” May continue,” Harumi Taguchi of IHS Markit said in a commentary.

In another sign of slowing activity, an official survey of factory managers showed Chinese manufacturing slowing in August.

The Manufacturing Purchasing Managers’ Index, or PMI, fell from 50.1 in August to 49.6 on a 0-100 scale in September, where 50 is the difference between expansion and contraction.

The survey was conducted before the power outages began, causing factories in parts of China to suspend operations.

Julian Evans-Pritchard of Capital Economics said in a report that the weakest readings were in energy intensive sectors such as chemicals and metals.

The growing demand for computers and other devices for remote work has affected the supply of the microchips that drive them.

The shortage of shipping containers due to the COVID-19 outbreak and occasional closure of ports have also disrupted global supply chains.

“Chinese and Southeast Asian ports are still suffering the consequences of those earlier closures, with record queues of ships waiting to be unloaded,” Rabobank said in a report on the shipping industry.

It is estimated that 10% of global container capacity was waiting offshore for unloading.

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