In March, the Chinese industry showed a cautious recovery from the severe blows a month earlier due to the corona crisis. In the rest of Asia, however, the picture in industry is mainly negative, including in major economies such as Japan and South Korea. Economic crisis in Asia has been severely undermined by the crisis, according to purchasing managers’ indices from the region.
According to market researchers Caixin and Markit, the index for China’s sizeable industry rose in March to 50.1 from 40.3 in February. A score of 50 or more indicates growth, below that shrinkage. However, Jibun Bank’s comparable gauge for Japanese industry fell to 44.8 last month and fell to 44.2 for South Korea. These are the lowest levels since the financial crisis.
Industrial activity was also clearly under pressure elsewhere in Asia, such as in Vietnam, Indonesia, the Philippines, Malaysia and Thailand. Taiwan narrowly managed to keep its head above water. The virus outbreak has disrupted the supply chain and demand for industrial goods from China and elsewhere in the world has fallen. There are also travel restrictions to prevent the spread of the virus, which leads to weaker demand.
To underscore the slump, the Japanese central bank released its so-called Tankan report, which measures the mood of major Japanese companies. It showed that sentiment in the country’s sizable industry has deteriorated sharply. For example, the crisis forced Japanese car manufacturers to close factories. The Japanese government is working on a huge support package to stimulate the economy, the third of the world.
Economists expect industry weakness in most Asian countries to persist and worsen for the time being, due to measures worldwide to contain the outbreak, including in the United States and Europe. These are important sales areas for industrial companies from Asia.