WORLD – Global Factories Affected By Coronavirus Outbreak. Global factories took a heavy toll in February from the coronavirus outbreak. A recent surveys showed activity in China shrinking at a record pace. This raises the prospect of a coordinated policy response by central banks to prevent a global recession.
China’s factory activity suffered the sharpest contraction on record in February. The Caixin/Markit Manufacturing Purchasing Managers’ Index (PMI) showed. Therefore underlining the crippling effects of tough travel curbs and public health measures taken to contain the outbreak.
The downturn in China, the world’s second-largest economy, dealt a severe blow to factories across Asia. As well as those in Japan, South Korea and Taiwan. They offered the clearest evidence yet of the epidemic’s damaging effects on global growth and businesses.
“Near-term prospects for Japan’s industrial sector appear very bleak,” said Joe Hayes, an economist at IHS Markit who compiles the survey. Separate data showed Japanese firms cut spending on plant and equipment in the quarter to December. However, this casts doubt on the BoJ’s view that robust domestic demand will make up for some of the weakness in exports.
Global Factories Affected By Coronavirus Outbreak.
In US, the Institute for Supply Management’s (ISM) index of national factory activity fell to 50.1 in February from 50.9 in January. Meanwhile, the virus outbreak is starting to weigh on a post-election recovery in Britain’s manufacturing sector. UK factories reported a big jump in delays in their supply chains.
South Korea’s factory activity also shrank faster in February, as export orders contracted at the quickest pace in over six years in a shattering blow to production.