TOKYO (REUTERS) - Manufacturing in China and Japan suffered in January amid a resurgence in coronavirus infections, while South Korea and Taiwan saw improvements, underscoring the fragile and uneven nature of the region's economic recovery.
Factory activity quickened in major chip exporters South Korea and Taiwan, as they benefited from continued brisk demand for semiconductors crucial to work-from-home IT goods.
But China's manufacturing activity expanded at the slowest pace in seven months in January, weighed down by falling export orders.
Japan also saw factory activity slip back into contraction as a new state of emergency, rolled out in January, hit operating conditions, Purchasing Managers’ Index (PMI) data showed on Monday (Feb 1).
"PMI readings for Asia suggest that manufacturing sectors improved further in most places. Buoyant global demand for electronics should continue to support the sector for at least the next few months," said Mr Alex Holmes, emerging Asia economist at Capital Economics.
Mr Takeshi Okuwaki, an economist at Dai-ichi Life Research Institute in Tokyo, said Japanese manufacturers may slash output as the state of emergency will unavoidably hurt the economy.
"A shortage of chip supply will take time to fix, which will also weigh on Japan's automobile production," he said.
China's Caixin/Markit Manufacturing PMI dropped to 51.5 last month, its lowest level since June last year and easing from December's reading of 53.0.
Although it remains above the 50 mark that separates growth from contraction, the index was below a median market forecast for a reading of 52.7.
The survey broadly aligned with Beijing's official PMI on Sunday, which showed the recovery in factory activity slowing as local Covid-19 cases rose.
Japan's final au Jibun Bank PMI fell to 49.8 in January from the previous month's 50.0 reading, as a fresh state of emergency measures in areas accounting for 55 per cent of the country's population hurt employment and output.
That was in stark contrast to South Korea, where factory activity rose at its fastest pace in a decade thanks to soaring exports.
Separate data showed South Korea's exports jumped 11.4 per cent in January from a year earlier to mark a third straight month of gains due in part to surging sales of memory chips.
South Korea experienced its third and strongest wave of infections this winter but is seeing a gradual decline in new cases.
In India, factory activity expanded at its strongest pace in three months in January, fuelled by a continued recovery in demand and output.
Manufacturing activity in Indonesia increased at a faster pace in January than in December, and such activity stopped contracting in the Philippines.
But activity shrank in Malaysia and rose at a slower pace in Vietnam, the PMI data showed.
China's economy expanded at a faster-than-expected rate of 6.5 per cent in the fourth quarter last year, as factories raced to fill overseas orders amid a surging pandemic.
But recovery hopes are being dampened by a sharp increase in Covid-19 cases as the authorities impose lockdown measures to curb the spread of the virus in the country's north.