Asian manufacturing powers experienced a slowdown in demand in November as US trade negotiations failed to produce significant results in exporting countries characterized by a renewed recovery in orders.
Asian countries have been reeling from trade uncertainties caused by US President Donald Trump’s drastic tariffs.
Manufacturing centers struggling with contraction
According to Purchasing Managers’ Indices (PMI), China, South Korea and Japan have seen massive declines in growth. On the other hand, South Asian countries experienced an acceleration in their growth.
China, the world’s largest manufacturer, also saw a drop in factory activity, followed by a contraction for the eighth executive month.
Steady declines in demand have failed to boost production despite already high inventory levels, contributing to persistent deflationary shockwaves.
Zichun Huang, China economist at Capital Economics, said: “Container throughput at Chinese ports changed little last month compared to October. To the extent that demand has improved, it has done little to support production amid already high inventory levels – the production component has fallen to a four-month low.
Another Asian country, Japan, despite its trade agreements with the United States, experienced a decline in new export orders, prolonging the crisis to two and a half years. The recession is often attributed to restricted investment and a stagnant business environment globally.
According to official data, Japanese companies’ spending on factories reached 2.9 percent in July-September, showing a slowdown from the previous quarter.
Although South Korea recently reached a trade deal with the United States, the country’s manufacturing activity contracted again for the second month.
Taiwan is also experiencing a similar fate characterized by a decline in industrial activity, but fortunately at a slower rate than other countries.
Emerging South Asian Markets
On the contrary, South Asian economies are outperforming major manufacturing hubs.
For example, Vietnam and Indonesia both reported rapid growth in factory activity. Similarly, Malaysia also announced that it has returned to massive growth.
