Manufacturing activities of Japan and China are being hit by a worldwide shortage of semiconductors, with both countries reporting declines that could compromise their nascent recovery.
Japan reported the biggest fall in industrial output in May, with a sharp drop in car manufacturing especially due to persistent world shortages of semiconductors, official numbers showed on Wednesday.
Factory output fell 5.9% in May, the Ministry of Economy, Trade and Industry (METI) said – more than double the 2.4% forecast by a Reuters poll of analysts, after a 2.9% increase from the month before. Automotive production declined 19.4% in the same month.
The bad economic news comes weeks ahead of the opening of the Olympics in Tokyo, which begins on July 23 after a year’s delay.
Meanwhile China’s factory activity fell to a four-month low in June due to a corresponding supply chain disruption as well as a COVID-19 outbreak in Guangdong province.