Asia Pacific Update: April 22
In today’s edition
In today’s edition, we look at the manufacturing industry across the region which is turning out to be a bright spot as it moves into recovery.
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Recovery Spotlight: manufacturing
With uncertainty over when the COVID-19 pandemic will come to an end, many companies have had to pivot to keep up with the lockdowns, regulations and economic changes brought on by the pandemic. For some markets, the manufacturing sector is among the bright spots in the long road to recovery.
Resilience through export
According to The Straits Times, South Korea and Australia are proving to be an odd couple of the global economy, managing to mitigate the impact of the Covid-19 crisis due to deep links with China’s growth and key advantages unique to themselves. China is the endpoint for more than 25 per cent of South Korea’s exports and more than two-fifths of Australia’s shipments. An economist also noted that the two countries each have one of the three Ps that typically drive growth – population, participation and productivity – Australia the first and South Korea the third.
Turning a corner
The Singapore Commercial Credit Bureau’s (SCCB) quarterly Business Optimism Index stated that the Singapore business sentiment has turned positive after a year into the pandemic. According to the index, the outlook for the manufacturing sector remained relatively upbeat, with five of the six indicators in the positive territory.
Signs of recovery are also evident in Indonesia, where factory activity rose to its highest level in nearly ten years in March as businesses reported a surge in new orders. The IHS Markit Indonesia Manufacturing Purchasing Managers’ Index grew to 53.2 in March, from 50.9 in February. That was the highest reading since the index was first published in 2011. Amid the rise in new orders, factories are pausing the downsize of their workforce to ease pressures on capacity. Manufacturing activities in The Philippines also rose in March though there is concern about a rise in prices for raw material due to shortages.
Moody Analytics forecasted that Malaysia’s manufacturing sector would return to pre-pandemic levels by Q1 2022. Sustained growth in external demand will continue to bolster the production outlook for trade-oriented industries, given the strong demand for electrical and electronics and rubber products and better economic prospects for major trading partners such as the US and China. Transport equipment has also seen a recent uptick, despite domestic and international travel restrictions.
In Cambodia, the Garment Manufacturers Association called on stakeholders to not punish factories that could not honour their delivery schedules as production has been halted due to a COVID-19 lockdown. The call follows a 14-day lockdown in the capital Phnom Penh and its adjacent Ta Khmau city until 28 April to curb the spread of the coronavirus. The lockdown requires all non-essential businesses to shut down and all residents to only leave their homes for emergencies.
In Hong Kong SAR, the government has offered generous subsidies with the hope to diversify the financial capital’s economy and lure factories back. With manufacturing comprising only 1% of the economy today, compared to 30% in the 1970s, the government hopes to increase spending on R&D for new products to 1.5% of GDP by 2022. The initiative seeks to revive its stagnant economy and create higher-paying jobs by encouraging more manufacturing in the territory.
Media analysis of stories covering Australia, Cambodia, Hong Kong SAR, Japan, Malaysia, Macau SAR, New Zealand, Philippines, Singapore, South Korea, Taiwan, Thailand, and Vietnam from 22 March to 22 April 2021.
This briefing was prepared by the Weber Shandwick Insight and Intelligence team in Singapore. If you feel a specialised briefing and analysis bulletin could benefit your team, please get in touch: email@example.com.
About COVID-19 Recovery Report:
- The views and opinions reflected by these headlines do not necessarily represent those of Weber Shandwiick.
- The content of this news bulletin is a summary of publicly available news articles on events and developments related to COVID-19