Manufacturers slowed activity last month in countries ranging from Japan to Taiwan and Malaysia, business surveys showed Wednesday, a sign of the challenge facing policymakers to fight inflation with tighter monetary policy – without paralyze growth.
China’s Caixin/Markit Manufacturing Purchasing Managers’ Index (PMI) came in at 48.1 in May, up from 46.0 the previous month, but still below the 50-point threshold that separates contraction from expansion, according to a private survey.
This result is in line with official data on Tuesday which showed Chinese factory activity declined at a slower pace in May. Although COVID restrictions are easing in some cities, they continue to weigh heavily on confidence and demand.
Blockages in China have hurt regional and global logistics and supply chains, with Japan and South Korea both reporting steep drops in production.
In May, Japan’s manufacturing activity grew at the weakest pace in three months and manufacturers signaled a further rise in input costs, according to the PMI survey, as the fallout from lockdowns in China and the conflict in Ukraine put pressure on the economy.
The final PMI at Jibun Bank Japan fell to 53.3 seasonally adjusted in May from 53.5 the previous month, marking the slowest pace since February.
“Production and new orders both rose at lower rates, with the latter growing at the weakest pace in eight months amid continued supply chain disruption and rising commodity prices,” he said. said Usamah Bhatti, economist at S&P Global Market Intelligence.
“The disruptions have been exacerbated by new lockdown restrictions across China, and have contributed to a sharp further lengthening of supplier lead times.”
Factory activity in the Philippines also slowed from 54.3 in April to 54.1 in May, while Malaysia’s fell to 50.1 from 51.6 in April, according to PMI surveys. Taiwan’s manufacturing activity stood at 50.0 in May, down from 51.7 in April.
In a glimmer of hope, South Korea’s exports grew at a faster pace in May than a month earlier, data showed on Wednesday, as increased shipments to Europe and the United States more than offsets the fallout from China’s restrictions.
South Korea’s monthly trade data, the first to be released among the major exporting economies, is considered an indicator of global trade.