Asia\`s factory activity tumbles on China\`s Covid curbs_ US slowdown

Asia's factory activity slumped last month as China's zero Covid curbs and cost pressures continued to hurt businesses_ surveys showed on Thursday.

Factory production was slow in countries ranging from Japan_ China_ South Korea to Taiwan in a sign sluggish demand was adding to headaches for companies already suffering from lingering supply limitations.

"China's pandemic curbs and geo-political tensions with the US continue to disrupt supply chains. Rising inflation is also hurting domestic demand across Asia_" said Toru Nishihama_ chief economist at Dai-ichi Life Research Institute in Tokyo.

"Fears of US recession also aren't helping. US and Chinese economies are engines of global growth so when both of them are wobbling_ that spells trouble for businesses."

China's private Caixin/Markit manufacturing purchasing managers' index (PMI) contracted for the first time in three months in August_ as soft demand_ power shortages and fresh coronavirus flare-ups disrupting production.

The unexpectedly weak reading echoed China's official PMI released on Wednesday_ which was also below the 50-point mark that separates growth from contraction on a monthly basis.

Japan's factory activity grew at its slowest pace in nearly a year last month_ while that of South Korea shrank at the sharpest pace in two years.

Manufacturing activity also deteriorated sharply in Taiwan_ with production and new orders both falling at the quickest pace since the initial wave of the Covid pandemic in May 2020.

The final au Jibun Bank Japan Manufacturing Purchasing Managers' Index (PMI) slided to 51.5 in August from July's 52.1_ marking the weakest growth rate since September 2021.

South Korea's PMI fell to 47.6 in August from 49.8 in the previous month_ remaining below the 50-threshold for a second month and hitting the lowest since July 2020.

Taiwan's PMI hit 42.7 in August_ down from 44.6 in  the prior month.

Weakening demand_ however_ is having the side-effect of easing price pressures. South Korean manufacturers saw input prices rise in August by the slowest rate in 19 months.