Asian factories shake off supply headaches but Omicron presents new risks

 The newly detected Omicron coronavirus variant has emerged as a fresh worry for the region's policymakers, who are already grappling with the challenge of steering their economies out of the doldrums

Asian factory activity grew in November as crippling supply bottlenecks eased, but rising input costs and renewed weakness in China dampened the region's prospects for an early, sustained recovery from pandemic paralysis.

The newly detected Omicron coronavirus variant has emerged as a fresh worry for the region's policymakers, who are already grappling with the challenge of steering their economies out of the doldrums while trying to tame inflation amid rising commodity costs and parts shortages.

China's factory activity fell back into contraction in November, the private Caixin/Markit Manufacturing Purchasing Managers' Index (PMI) showed on Wednesday, as soft demand and elevated prices hurt manufacturers.

The findings from the private survey, which focuses more on small firms in coastal regions, stood in contrast with those in China's official PMI on Tuesday that showed manufacturing activity unexpectedly rose in November, albeit at a very modest pace.

"Relaxing constraints on the supply side, especially the easing of the power crunch, quickened the pace of production recovery," said Wang Zhe, senior economist at Caixin Insight Group, in a statement accompanying the data release.

"But demand was relatively weak, suppressed by the COVID-19 epidemic and rising product prices."

Beyond China, however, factory activity seemed to be on the mend with PMIs showing expansion in countries ranging from Japan, South Korea, Vietnam and the Philippines.

Japan's PMI rose to 54.5 in November, up from 53.2 in October, the fastest pace of expansion in nearly four years.