Asia’s manufacturing sectors faced continued challenges in November, with factory activity declining across key economies amid sluggish demand. Despite some positive signs from U.S. trade negotiations, these improvements have yet to translate into a notable recovery in orders. Several purchasing managers’ indices (PMIs) released on Monday revealed varied conditions regionally: China, Japan, South Korea, and Taiwan all reported decreases in activity, while Southeast Asian nations mostly experienced growth.
In China, the world’s largest manufacturer, private-sector PMI data indicated a return to contraction, following Beijing’s official figures, which showed activity declining for the eighth straight month, albeit at a slower rate. Zichun Huang of Capital Economics explained that container throughput at Chinese ports was relatively unchanged from October, and despite a slight uptick in output prices, demand remained weak due to high inventory levels. This scenario suggested persistent deflationary pressures.
Throughout Asia, manufacturers have been grappling with the uncertainty brought by U.S. tariffs imposed by President Donald Trump. Although trade negotiations with countries like Japan and South Korea, along with eased tensions with China, have provided some confidence, many firms are still adjusting to the new trade landscape. Japan’s PMI indicated a continued decline in new orders, marking the downturn’s duration at 2.5 years, amid sluggish global demand, tighter budgets, and subdued investment. Official data showed that corporate spending on factories rose 2.9% year over year in July-September, though the pace slowed.
South Korea’s factory activity contracted for the second consecutive month in November, but a finalised U.S. trade deal offered some clarity. Korean exports increased for the sixth straight month, driven by record chip sales and auto exports following the deal. Taiwan’s PMI showed a slower decline in factory activity.
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Meanwhile, emerging-market manufacturers in Indonesia and Vietnam reported strong growth, with Malaysia returning to expansion. Overall, the region’s manufacturing landscape remains mixed, reflecting ongoing global trade uncertainties and regional resilience.
