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On the contrary, we are studying behind the scenes of Asia’s apparently strong economic recovery from the depth of last year’s pandemic.

Our findings may be surprising. Although the recent heavy export data and the active stock market paint an optimistic picture, the supply chain in the region is straining, and new rifts indicate the risk of serious disruption in the future.

Increase in Covid cases shines a light on a robust recovery

South Korea’s trade data can be a good indicator of the health of regional trade and economic activities.

Asia’s fourth-largest economy is an important exporter of technological components such as electronic displays and computer chips, as well as finished products such as cars and smartphones.

The heavyweight data released earlier this month showed that the South Korean economy is coming out of recovery mode and returning to growth.

Exports amounted to 54.8 billion U.S. dollars, an increase of 40% year-on-year, which was higher than analysts’ expectations. This also marked the best June on record and the eighth consecutive month of gains.

Happy for Chaebol Leading production companies such as Samsung, SK Group and Hyundai, the semiconductor industry is Enjoy the new super cycle, And the order Korea shipbuilding Set the highest level since the outbreak of the global financial crisis.

However, what these data do not show is that the voices of factory managers throughout the manufacturing industry are getting more and more noisy. They are highly concerned about worsening shipping delays, tightening of freight capacity, shortages of raw materials and soaring prices.

There are signs that these supply chain pressures are common not only in South Korea, but also throughout the region, and they are getting worse.

IHS Markit economist Usamah Bhatti said that the latest survey of manufacturing purchasing managers showed that delivery times have been extended for 20 consecutive months.

“Anecdotal evidence shows that the interruption is the result of shortages of raw materials and logistics difficulties, especially in shipping,” he said of the situation in South Korea, adding that the increase in input prices in June was the largest on record.

More worrying signs are emerging at the core of China’s manufacturing and shipping industries.

Due to the slowdown in new jobs and purchasing activities, the PMI index of the world’s second largest economy fell to a three-month low last month.

“In the second half of this year, last year’s low base effect will be weakened. Inflationary pressures coupled with the economic slowdown are still severe challenges facing China,” warned Wang Zhe, senior economist at Caixin Insight Group.

As our FT colleagues Written at the end of last monthWorkers at the Yantian dock in Shenzhen, South China were infected with the coronavirus and caused congestion to spread to other nearby ports.

Highlighting the seriousness of the capacity problem, the spot price of containers soared to a record high, exceeding the level that we have witnessed since the second half of 2020.

Andrew Lee, a shipping industry analyst at Jefferies in Hong Kong, said that the current global supply bottleneck has caused nearly one-third of the world’s shipping fleet to “wait at berths.”

He warned that congestion might actually worsen. Lee pointed out that in the coming months, when many people in the northern hemisphere return to school and work from summer vacation, the peak season for container shipping will begin. Then came the accumulation of Christmas.

This means that the delayed departure of ships from Asia will only lead to longer and longer queues arriving at major ports in the US and Europe.

At the same time, the storm caused by the Delta variant is setting off a new and more contagious coronavirus pandemic in the region.

Seoul, Tokyo, Sydney and other places Forced to retreat In terms of economic reopening plans, other countries, such as Indonesia, are in a comprehensive crisis response mode.

The spread of Delta variants also disrupted the recovery of other key assets Regional manufacturing power, Such as Vietnam. The latest PMI survey of the vibrant Southeast Asian economy shows that companies there have scaled back their employment and purchasing activities in response to the latest wave of communication.

Another economist, Andrew Harker, said: “Although it is not as severe as after the pandemic in early 2020, the decline in manufacturing output in June was greater than that of Covid-19 since the survey began more than 10 years ago. Any previous period must be strong in IHS Markit.

Quickly understand the prospects of an unfortunate and possibly unprepared company or industry: take a look Lasting damage The shortage of automotive chips that began a year ago has affected European carmakers.

As Bain analysts recently warned, the chip shortage is “not a’one-and-for-all’ event.”

Trade ties

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