Factories struggling as supply constraints hit, costs rise
Global manufacturing activity took a big hit from supply chain bottlenecks and escalating costs, exacerbated by pandemic-induced factory shutdowns in Asia and signs of slowing Chinese growth, surveys showed on Friday.
While countries, where outbreaks of the Delta coronavirus variant receded, saw an improvement in activity, growth shrank in some as chip shortages and supply disruptions impacted those still struggling to shake off the hit from Covid-19.
Euro zone and British manufacturing growth remained strong but activity suffered from logistical issues, product shortages and a labour crunch that are likely to persist and keep inflationary pressures high.
"Though some of the bottlenecks should soon start to ease, many sectors – most notably those requiring semiconductors – are likely to face disruption for much of 2022," said Martin Beck, senior economic advisor to the EY ITEM Club.
"This signals activity is likely to remain constrained for some time to come."
IHS Markit's final manufacturing Purchasing Managers' Index (PMI) sank to 58.6 in September from August's 61.4 and Britain's PMI fell for a fourth month in a row, dropping to 57.1 from 60.3. Anything above 50 indicates growth.
Factories in Germany, Europe's largest economy, had been humming along almost undisturbed during the pandemic lockdowns that have impacted the services sector but shortages of intermediate goods and some raw materials are now holding industry back.
Growth in French manufacturing weakened a tad more than initially forecast, its PMI showed, as problems over supplies of goods weighed on the industry.
Those supply bottlenecks kept pressure on the costs of the raw materials factories need and manufacturers passed some of those increases to customers and the euro zone output prices index approached the record high seen in the summer.
Inflation in the common currency area jumped to a 13-year high of 3.4% last month, preliminary official data showed on Friday, well above the European Central Bank's 2.0% target.
Source: www.thedailystar.net
