Asia’s manufacturing sector showed uneven performance in November, as factory activity in major economies struggled to gain momentum despite recent developments in U.S. trade negotiations. The latest purchasing managers’ indexes (PMIs) revealed a split picture: while traditional industrial hubs like China, Japan, South Korea, and Taiwan faced contraction, emerging Asian markets continued to report growth.
In China, the world’s largest manufacturing economy, private-sector PMIs indicated that factory output returned to contraction, following Beijing’s official data showing an eighth consecutive month of decline, though at a slower pace. Analysts cited stagnant container throughput at Chinese ports and elevated inventory levels as key factors suppressing production.
“Even with slight improvement in demand, production remained under pressure due to high stock levels, while output prices stayed low, reflecting ongoing deflationary trends,” said Zichun Huang, a China economist at Capital Economics.
Despite these challenges, trade data suggests a more optimistic outlook for export-driven sectors in Asia. Exports from several regional economies have surged in recent months, offering potential support for manufacturers navigating the global trade landscape, according to Shivaan Tandon, Asia economist at Capital Economics.
Diverging Regional Trends
Japan’s factory sector continued to face headwinds, with new orders declining for the 30th consecutive month. The downturn has been attributed to global business weakness, tighter client budgets, and restrained capital investment. Official data also showed that corporate spending on factories and equipment increased 2.9% in the July-September period year-on-year, but growth slowed compared with the previous quarter.
South Korea experienced its second consecutive month of manufacturing contraction in November. Nonetheless, a finalized U.S.-Korea trade deal provided some stability for exporters, and overall shipments from the country increased for the sixth straight month, driven by record chip sales and rising automobile exports.
Taiwan’s factory activity also continued to fall, though the decline moderated compared to prior months.
Meanwhile, emerging-market manufacturers in Asia performed strongly. Indonesia and Vietnam reported robust expansion in factory activity, while Malaysia returned to growth after a period of slowdown. India’s manufacturing growth moderated from October’s high, yet its PMI remained significantly higher than regional peers. The country’s GDP grew at its fastest pace in 18 months during the July-September quarter, fueled by strong consumer spending.
Outlook
While Asia’s manufacturing landscape remains mixed, analysts note that export growth and regional economic resilience could provide a buffer against global uncertainties. Continued monitoring of trade negotiations and domestic demand will be critical in shaping the near-term trajectory of the region’s industrial output.
