Asia's factories lose momentum as US trade progress fails to lift demand

Asia’s major manufacturing hubs saw another month of weak factory activity in November, as improving U.S. trade ties failed to spark a meaningful rebound in orders. Fresh PMI data showed mixed conditions across the region: China, Japan, South Korea and Taiwan all posted declines, while several Southeast Asian economies continued to grow.

In China, a private PMI returned to contraction just a day after the official survey reported an eighth straight month of shrinking activity. Economists noted that port throughput barely changed and high inventories kept production subdued, despite slight improvement in demand. Output slipped to a four-month low, and price indicators pointed to ongoing deflationary pressure.

The broader region continues to contend with uncertainty from U.S. tariffs introduced under President Donald Trump. Although recent trade agreements with Japan and South Korea, as well as easing tensions with China, have provided some clarity, many exporters are still adapting to the new landscape.

Japan’s PMI showed new orders declining for a two-and-a-half-year stretch, weighed down by weak global demand and cautious business spending. Separate data showed corporate investment growth slowing.

South Korea’s manufacturing sector contracted for a second month, though exports rose for the sixth straight month in November, boosted by record chip sales and stronger auto shipments under a newly finalized U.S. trade deal.

Taiwan also reported another month of contraction, though the pace eased slightly.

In contrast, emerging Southeast Asian economies continued to outperform. Indonesia and Vietnam registered strong factory growth, and Malaysia returned to expansion, highlighting the region’s resilience even as bigger manufacturing giants struggled.