S&P Global said on the 4th that last month’s purchasing managers’ index, a gauge of business conditions, showed manufacturing output generally expanded in major Asian economies.
PMI readings for Taiwan, Japan and South Korea all rose in April, reflecting front-loaded purchasing as firms prepared for delivery delays and further price increases.
S&P Global cited AI-related demand in Japan and Taiwan, and new product launches in South Korea, as factors supporting production and sales.
Still, the pickup is difficult to read as a broad recovery. The data also reflect inventory building by companies and their customers as worries grow over logistics disruptions and higher prices if the war drags on.
The Middle East is a key supplier of crude oil, gas and fertilizer for Asia. Since fighting began in late February, prices for energy and other raw materials have climbed, raising costs for Asian manufacturers and weighing on sentiment.
Uncertainty is also rising over how long the conflict will last. “This war has brought the biggest supply-chain disruption since the COVID pandemic,” said Annabel Fiddes of S&P Global Market Intelligence.
Cost pressures were reported across the region. South Korean manufacturers said both input costs and selling prices jumped to record levels. In Japan, Indonesia and Vietnam, higher raw material prices pushed input costs to their highest levels in years.
The hit has been more direct in some emerging markets. Output fell in Indonesia and Vietnam even as costs surged. Vietnam’s new orders declined in April for the first time in eight months. “If prices and supply conditions do not improve quickly, production is also likely to slow,” said Andrew Harker of S&P Global Market Intelligence.
India was not immune. Its manufacturing sector continued to improve modestly, but the pace was the second-slowest in about four years, indicating that rising costs are constraining the recovery.
Analysts said output is being supported by stockpiling demand, but other countries could face renewed slowing once that effect fades. Usamah Bhatti, an economist at S&P Global Market Intelligence, said how sales and production move after inventory building weakens will be a key variable for manufacturing conditions in the coming months.
* This article has been translated by AI.
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