China's factory activity shrinks across Asia

Employees work on assembling automated guided vehicles AGV at Lonyu Robot Co in Tianjin.

In November, the TOKYO factory output slumped widely across Asia as slowing global demand and uncertainty over the fallout from China's strict COVID 19 lockdown weighed on business sentiment, according to private surveys on Thursday.

Asia's economic outlook for 2023 was highlighted by the results, as the lock downs disrupt international supply and heighten fears of a further slump in its economy, the world's second-largest.

A private survey showed that China's factory activity shrank in November despite the pandemic curbs. Employment and economic growth in the fourth quarter was affected by the result.

In export-reliant economies, such as Japan and South Korea, manufacturing activity decreased, underscoring widening damage caused by weak global demand and stubbornly high input costs, according to surveys.

The declines were due to cooling market conditions, sustained cost pressures and weak underlying demand, according to Laura Denman, the head of S&P Global Market Intelligence, which compiles the survey on Japan.

In November, China's Caixin S&P Global manufacturing purchasing managers' index PMI was 49.4 compared to 49.2 in the previous month, but still below the 50 mark, which separates growth from contraction. It hasn't been above 50 for four consecutive months.

Manufacturing activity had hit a seven-month low in November, according to a data released by the official survey on Wednesday.

Japan's au Jibun Bank PMI fell to 49.0 in November from October's 50.7. It was the first contraction since November 2020.

South Korea's factory activity decreased for a fifth consecutive month in November, but the downturn moderated slightly, possibly suggesting that the worst was over for businesses.

Lockdowns in China have hit the production at a factory that is the biggest producer of Apple's iPhones. They have stoked rare street protests across many cities.

The impact of China's woes was felt widely across Asia. Taiwan's PMI was 41.6 in November, up slightly from 41.5 in October, but still well below the 50 mark.

Vietnam's PMI fell to 47.4 in November from 50.6 in October, while Indonesia's PMI fell to 50.3 from 51.8, according to private surveys.