China’s coronavirus flare-ups possible ‘headache’ for global supply chains, Omicron variant still a factor
- China’s official manufacturing purchasing managers’ index (PMI) fell to 50.1 in January, down from 50.3 in December
- US manufacturing activity fell to a 14-month low in January amid an outbreak of Covid-19 cases
Coronavirus flare-ups in China could still prove a “headache” for global supply chains as it is too early to “sound the all-clear” from the impact of the Omicron variant on worldwide manufacturing, according to an analyst.
Expansion of China’s factory activities slowed in January amid repeated Covid-19 outbreaks and the seasonal disruption to production ahead of the Lunar New Year.
China reported 63 confirmed coronavirus cases on Tuesday, and while 27 were found among people arriving from overseas, domestic infections were reported in the eastern province of Zhejiang, the northern city of Tianjin and Beijing.
It is worth reiterating that it is too early to sound the all-clear regarding Omicron disruption to global industry
“It is worth reiterating that it is too early to sound the all-clear regarding Omicron disruption to global industry,” said Simon MacAdam, senior global economist at Capital Economics. “While China’s containment efforts are proving to be more targeted and less disruptive this time, it is still the case that provinces accounting for 5-10 per cent of China’s [gross domestic product] are contending with virus flare-ups, and this could yet become a headache for global supply chains in the months ahead.