Fresh PMI data shows Asia’s major manufacturing hubs are still struggling with weak global demand, despite easing U.S. trade tensions. The slowdown highlights persistent fragility in the global economy and raises risks for export-reliant countries heading into 2026.
What’s happening
Factory activity across China, Japan, South Korea and Taiwan contracted again in November, indicating that stabilising trade ties with Washington have yet to spark a meaningful recovery in orders. High inventories, subdued investment and weak new orders are weighing on output across the region.
Key details
China: Private-sector PMI fell back into contraction; port throughput was flat; output hit a four-month low; deflationary pressures persist.
Japan: New orders declined for the 2.5th straight year; companies cite the sluggish global environment and tighter budgets. Corporate capital spending grew only 2.9% y/y, slowing from the previous quarter.
South Korea: Manufacturing shrank for a second month, though exports beat expectations led by record chip sales and stronger auto shipments after finalising a U.S. trade deal.
Taiwan: Activity continued to fall, but at a gentler pace.
Bright spots
Indonesia and Vietnam logged strong factory growth, while Malaysia returned to expansion signalling that Southeast Asian emerging markets are outperforming North Asia’s manufacturing giants.
What’s next
Economists say any meaningful rebound depends on a sustained recovery in global demand, easing inventory overhangs, and clarity on U.S. trade policy heading into 2026. Until then, Asia’s manufacturing sector is expected to remain uneven and fragile.
With information from Reuters.
