December 1 - Asia's manufacturing giants faced weak demand in November, leading to ongoing declines in factory activity. Despite some progress in U.S. trade negotiations, it did not result in a noticeable rise in orders.
Recent purchasing managers' indexes (PMIs) revealed varying trends across the region. China, Japan, South Korea, and Taiwan all reported decreased activity, while many Southeast Asian countries experienced growth.
In China, the largest manufacturer globally, factory activity dipped back into contraction according to a private-sector PMI. This comes a day after the official measure indicated that activity has fallen for the eighth straight month, although at a slower rate.
“The container traffic through Chinese ports was relatively unchanged last month compared to October. Even with some improvement in demand, it had little effect on production due to already high inventory levels, leading the output component to hit a four-month low,” said Zichun Huang, an economist at Capital Economics.
“While the output price component increased slightly, it remained low, reflecting ongoing deflationary pressures.”
This year, businesses in major exporting countries in Asia have been trying to manage the uncertainty caused by sweeping tariffs from U.S. President Donald Trump.
Despite Trump’s trade agreements with countries like Japan and South Korea, which have provided some confidence, many companies are still adapting to the new trade landscape in the U.S.
Japan's PMI showed a continued decline in new orders, marking two and a half years of downturn, attributed to factors like a slow global business climate, tighter client budgets, and reduced capital investments.
Additionally, data released showed that Japanese corporate spending on factories and equipment rose by 2.9% in the July-September quarter compared to the previous year, but this was a slowdown from the previous quarter.
South Korea's factory activity contracted for the second consecutive month in November, although a finalized trade deal with the United States provided some clarity for manufacturers.
On a positive note, separate data indicated that Korean exports rose in November for the sixth month in a row, exceeding market expectations. This growth was driven by record chip sales due to strong technology demand and a boost in automotive exports following the U.S. trade deal.
Taiwan's PMI showed continued decline in factory activity, but at a slower rate.
Meanwhile, manufacturers in Asia’s emerging markets continued to perform well, with Indonesia and Vietnam reporting strong growth in factory activity, while Malaysia returned to growth.