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Shortages, shipping, shutdowns hit Asian factory output - The Journal

Shortages of power, computer chips and other parts, soaring shipping costs and shutdowns of factories to battle the pandemic are taking a toll on Asian economies

Shortages of power, computer chips and other parts, soaring shipping costs and shutdowns of factories to battle the pandemic are taking a toll on Asian economies.

Data released Thursday showed Japan's factory output slowed while China's manufacturing outlook weakened.

Japan's Suzuki Motor Corp. became the latest automaker to idle production lines for a few extra days due to shortfalls in components.

While Japan and some other countries are beginning to ease out of emergency measures to curb the spread of the coronavirus, others are having to reimpose such precautions, adding to uncertainty over the outlook for regional and global growth.

Factory output in Japan fell in August by 3.2% from the month before, as pandemic-related shutdowns hit manufacturers across Asia. That followed a 1.5% decline in July.

Automakers and producers of IT products and other electrical machinery were the hardest hit, the government reported.

Suzuki said it expected to suspend operations at a factory in central Japan for an extra three days and to do the same two days at another factory.

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

Retail sales fell a much worse than expected 4.1% from a month earlier due to weak demand for clothing and appliances.

While there are signs of improvement in some parts of Asia, “fresh peaks for new daily cases in some countries and relatively slow progress in vaccination rollouts in Southeast Asia mean the risks of semiconductor and other component shortages could persist for an extended period," 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 in September on a 0-100 scale where 50 marks the break between expansion and contraction.

The survey was conducted before power shortages began causing factories in some parts of China to begin suspending operations.

The weakest readings were in energy intensive areas such as chemicals and metals, Julian Evans-Pritchard of Capital Economics said in a report.

“Respondents to the surveys noted that material shortages and transportation delays were still holding back output," he said.

Surging demand for computers and other equipment for remote work has strained supplies of the microchips that run them.

Shortages of shipping containers and occasional shutdowns of ports due to COVID-19 outbreaks also have caused bottlenecks throughout global supply chains.

“Chinese and South-east Asian ports are still suffering the consequences of those earlier closures, with record queues of ships waiting to unload," Rabobank said in a report on the shipping industry.

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

FILE - In this April 27, 2020, file photo, employees of a private delivery company sort out parcels at a distribution center in Beijing. Shortages of power, computer chips and other parts, soaring shipping costs and shutdowns of factories to battle the pandemic are taking a toll on Asian economies. (AP Photo/Andy Wong, File)

FILE- In this April 14, 2020, file photo, a lone passenger wearing a face mask help curb the spread the coronavirus sits in spread out seating at the Hua Lamphong Railway Station in Bangkok, Thailand. Shortages of power, computer chips and other parts, soaring shipping costs and shutdowns of factories to battle the pandemic are taking a toll on Asian economies. (AP Photo/Sakchai Lalit, File)

FILE - In this July 24, 2019, file photo, workers watch as a truck passes by stacks of shipping containers at a port in Yingkou in northeastern China's Liaoning Province. Shortages of power, computer chips and other parts, soaring shipping costs and shutdowns of factories to battle the pandemic are taking a toll on Asian economies. (AP Photo/Olivia Zhang, File)

FILE - In this Aug. 6, 2020, file photo, a shopper pulls a cart full of clothing at a market in Bangkok, Thailand. Shortages of power, computer chips and other parts, soaring shipping costs and shutdowns of factories to battle the pandemic are taking a toll on Asian economies. (AP Photo/ Gemunu Amarasinghe, File)

FILE - In this July 15, 2021, file photo, workers wearing face masks to help curb the spread of the coronavirus sew layers for ice-skating shoes at a factory in the ice and snow sports equipment industry park in Zhangjiakou in northwestern China's Hebei province. Shortages of power, computer chips and other parts, soaring shipping costs and shutdowns of factories to battle the pandemic are taking a toll on Asian economies. (AP Photo/Andy Wong, File)

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