Ahead of the busiest Christmas season, manufacturing activity in Asia stayed subdued, prolonging its ongoing downturn this year.
The manufacturing purchasing managers’ index, which was released on Monday by S&P Global and au Jibun Bank, shows that factory activity in the region generally declined in September as a result of a decline in output and new work caused by lackluster global demand for goods.
Japan’s PMI decreased even more from the 50-point threshold that divides expansion from contraction, closing the gap to 48.5 this month from 49.6 in August.
Taiwan’s gauge showed a notable increase from 44.3 to 46.4, indicating a milder decline in the previous month. This export-driven economy has been severely impacted by the global downturn, with its PMI remaining well below zero since May 2022.
Southeast Asia’s manufacturing rebound also stalled, with Indonesia—the best-performing country in the region—seeing its growth slip to 52.3 in September from 53.9 in August.
After a month of expansion, factories in Vietnam suffered a decline in activity, joining the likes of Thailand, Malaysia, and Myanmar. The Philippines was the only country to see improvement, from contraction to expansion.
As manufacturing enters its peak season before the Christmas and New Year vacations, the most recent data displays caution warnings. It undermines cautious optimism that the world economy is stabilizing and that exports and consumer demand are even strengthening in some regions.
Manufacturers expected to face challenging times ahead due to the impending El Nino dry spell and reduced oil supply, which could rekindle cost pressures and prolong the increase in borrowing prices.
Data from China already demonstrated how fragile the rebound could be. Last month, its official manufacturing PMI increased to 50.2, marking the first increase since March. But after the country implemented stimulus, the more export-focused Caixin manufacturing PMI dropped to a less-than-expected 50.6, albeit it was still in expansion territory.
Ahead of the busiest Christmas season, manufacturing activity in Asia stayed subdued, prolonging its ongoing downturn this year.