Divergent Global Manufacturing Trends: Asia Rises While Europe Sinks

Manufacturing activity in Europe fell sharply, with further demand declines dashing hopes of recovery. However, China's manufacturing sector recovered, aided by government stimulus and pre-tariff export surges. The diverging trends in manufacturing highlight global economic challenges, with significant impacts looming from potential U.S. tariffs under President-elect Trump.

Manufacturing activity across Europe experienced a sharp decline last month as demand waned, contradicting hopes for a quick recovery. In contrast, China's factories showed a robust recovery, driven by governmental stimulus and a surge in exports ahead of proposed tariffs by U.S. President-elect Donald Trump, who will assume office in January.

Surveys indicated that Trump's tariffs could further strain the struggling euro zone economy. The HCOB's euro zone manufacturing PMI, collated by S&P Global, fell to 45.2 in November, with readings remaining below the growth threshold since mid-2022. German manufacturing stayed in contraction, while France faced the steepest decline in new orders since the pandemic onset in 2020.

Meanwhile, Asia's leading manufacturing economies ramped up production. China's manufacturing expanded at its fastest rate in five months, supported by stimulus measures and export boosts. However, challenges remain as Japan's PMI showed a decline, and Southeast Asia's factory activity continued to slow.

(With inputs from agencies.)