In December, the S&P Global Market Intelligence purchasing managers index (PMI) for manufacturing in Vietnam slipped to 46.4 from 47.4 in November, its lowest rating since September 2021.

Ratings above 50 signal expansion; below 50 indicates contraction.

New orders arriving at the country’s factories also saw the greatest drop since September 2021. 

Vietnam is a key supplier of manufactured goods to the U.S. and Europe, where economies have been slowing for months, as well as to China, which has become engulfed by a tidal wave of COVID cases.

“Securing new work is likely to remain difficult until there is a pickup in these markets, with a number of firms indicating that they expect demand to remain subdued in the near term at least,” Andrew Harker, S&P Global Market Intelligence’s chief economist, wrote in a press release.

Malaysia’s December PMI edged down to 47.8 from 47.9 the month before, lower than in any month since August 2021.

Taiwan’s manufacturing PMI ticked up to 44.6 in December from 41.6 in November, but remained in its seventh consecutive month in contraction.

“There were widespread reports of weaker demand both at home and overseas, with firms commenting on reduced demand across Europe, mainland China, and the U.S. in particular,” Annabel Fiddes, an S&P Global Market Intelligence economist, told Bloomberg.

“Business confidence stayed firmly in negative territory, as manufacturers anticipate further cuts to output in the months ahead,” she added. “This seems increasingly likely if signs of spare capacity persist and global demand conditions fail to recover.”

The Chinese government’s manufacturing PMI slid further last month, dropping to 47 after registering 48 in November. It was the sharpest one-month decline since February 2020 when COVID infections gripped the world and politicians began shutting down nations’ economies.

The drop was a harbinger of the economic slump brought on by the country’s sudden wave of COVID cases after containment measures were lifted last fall.

“Most factories I know are way below where they could be this time of year for orders next year,” supply chain analyst Cameron Johnson at Tidal Wave Solutions told CNBC.

“A lot are at 50 percent [of normal order levels]; some are at 20 percent,” he noted.

More than 56 percent of manufacturers reported being “greatly” impacted by the country’s COVID surge, according to a survey by China’s National Bureau of Statistics.

TREND FORECAST: The higher interest rates rise the deeper the economies will fall. And should nations fight COVID War 2.0 as they spread fear that the new omicron subvariant “XBB. 1.5” is extremely transmissible, additional lockdowns and draconian mandates will push the world into depression.