Crypto News: Supply Lines: Bumpy factory recovery

Dogged for months by shortages of raw materials, labor instability, quickening inflation and weakened consumer demand, the world's industrial engine is still struggling to fire on all cylinders.

Factory activity in China posted its biggest improvement in more than a decade. Elsewhere in Asia and in Europe's big economies, though, manufacturing slowdowns continue.

China's manufacturing purchasing managers' index rose to 52.6 last month, the National Bureau of Statistics said Wednesday, the highest reading since April 2012. (Full story here.)

Here's what Chang Shu and Eric Zhu of Bloomberg Economics had to say:

"The recovery is outpacing the rebound at a comparable stage in early 2020 after the national lockdown was lifted. Looking ahead, it will be hard to keep up this brisk pace, with global growth slowing and pent-up demand after Covid reopening likely to fade."

After lifting strict Covid restrictions, China unleashed a reopening that may buoy the world economy and stabilize global trade. But the initial tailwind from the world's No. 2 economy wasn't strong enough to pull major Asian exporters like South Korea, Taiwan and Japan out of slumps.

A divergence was apparent in Wednesday's data dump: Southeast Asia's more domestically driven economies forged ahead with expansions while North Asia's export-oriented hubs lagged, according to S&P Global manufacturing purchasing managers' indexes. (Read more here.)

Asia Details:

Thailand posted a region's best PMI reading of 54.8 as it ramped up production
Taiwan showed the sharpest improvement in the region, with its PMI jumping to 49 from 44.3
Vietnam's gauge jumped sharply to 51.2, crossing the 50 mark that separates expansion from contraction
The Philippines, Indonesia and Myanmar likewise posted positive PMI readings
A downturn steepened in Japan, where the PMI fell to 47.7, its lowest in more than two years
South Korea reports its PMI data on Thursday, but its export slump deepened amid slowing global demand and a plunge in chip prices

'Stupid Slow'

Meanwhile, more data out today showed German factories stayed in contractionary territory for an eighth straight month, and France's producers sank below 50 level after peaking above it in January. Readings in Spain and Italy, however, flashed expansions.

US supply-management numbers are due out later today but more sluggish-to-uneven results are expected. Earlier this week a Dallas Fed report said a contact in the printing industry reported that "it seems like someone turned off the spigot, as we have gotten stupid slow, as have others in our industry."

Additional Reading:

—Brendan Murray in London

Rules of Roadmap | Shares of Kuehne+Nagel surged Wednesday after the Swiss logistics giant announced 2022 results and launched a strategic "Roadmap 2026" at its capital day in London. The stock touched the highest mark since May 2022. "The macroeconomic environment will remain challenging in 2023 due to geopolitical developments and inflation," the company said in a statement. "However, we expect the positive growth and earnings trend that has continued for many years to continue this year, albeit excluding the exceptional business volumes and results in financial years 2021 and 2022."

TPM23 news | The White House's supply-chain envoy said the ports and logistics industry must move toward automation, a sticking point in protracted contract talks between US West Coast dockworkers and their employers.
Chips rules | The Biden administration warned companies lining up for funding from the US Chips and Science Act that the money will come with major strings attached, including restrictions on investing in other countries and a limit on much-prized stock buybacks.
Breaking ground | Tesla's planned auto plant in Mexico will require around $5 billion in investment, a government official said, providing a first official estimate on the cost of the project.
Long push | The European Union will need at least several months to sign off on the landmark post-Brexit deal to smooth cross-border trade in Northern Ireland. Meanwhile, US businesses are poised to invest billions of dollars into Northern Ireland if the "Windsor" deal leads to political stability.
Friend shoring | The US may need to set up a new trade consortium to meet the anti-China demands of new electric-vehicle tax credits passed by Congress last year, the head of the group that lobbies for most major automakers said Tuesday.
Getting back on track | Bloomberg Opinion's Brooke Sutherland spoke by phone this week to Norfolk Southern CEO Alan Shaw about the derailment, the NTSB's preliminary findings and where the company and the rail industry go from here.
EV boost | The US Postal Service is buying more than 9,000 battery-powered delivery vans made by Ford as part of a $10 billion push to electrify its aging fleet.
New energy | Washington is full of self-professed China hawks, both the Republican and Democrat varieties. But Gina Raimondo hasn't embraced the label, which is notable: As US Commerce secretary she plays a leading role in the Biden administration's China containment strategy.

Rail rules | Democratic lawmakers introduced a bill that would place more regulations on trains carrying hazardous flammable materials, in one of the first congressional actions in response to the train derailment in Ohio, Bloomberg Government reports.
Down to normal | East-West air-freight rates from Shanghai declined 4.6% in January and were down 37% from last year, according to data from Drewry, but are still 40% above 2019 levels. Air rates have proved more resilient than ocean, as capacity remains about 8-9% below 2019, according to IATA. Bloomberg Intelligence expects rates to keep moving toward historical averages as more cargo-hold capacity comes back and economic conditions improve.
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