Asia's manufacturing activity broadly stagnated in September as pandemic-induced factory shutdowns and signs of slowing Chinese growth weighed on the region's economies. China's waning economic momentum dealt a fresh blow to the region's growth prospects, with the official Purchasing Managers Index showing the country's factory activity unexpectedly shrank in September due to wider curbs on electricity use. Although the disruption from large virus waves in the region is easing somewhat, unmet orders continue to pile up, meaning that the resulting shortages further down supply chains are set to remain for some time to come. On a more positive note, countries where large outbreaks of the Delta variant receded saw an improvement in activity, such as Indonesia and India. But factory activity in September shrank in Malaysia and Vietnam, and grew in Japan at the slowest rate in seven months, as chip shortages and supply disruptions added to the woes of a region still struggling to shake off the hit from the pandemic.
