Tokyo: November Asia manufacturing PMI numbers revealed a stark divide across the region, with industrial giants China, Japan and South Korea stuck in contraction, while many countries in ASEAN and India were looking at expansion. Sluggish global goods demand, persistent uncertainty about tariffs, and only modest gains from recent U.S. trade deals are the reasons the region’s factory pulse remains weak, Dec. 1, 2025.
The fact that reality was reinforced by a raft of November purchasing managers’ index releases, with a broad set of PMIs polled by Reuters showing China, Japan, South Korea and Taiwan all reporting falls in factory activity, even as Southeast Asian manufacturers largely saw growth. The background is therefore still mixed for manufacturing PMIs in Asia, with clear rules from U.S. trade deals that set tariffs but not quite enough new orders to lift the region decisively out of its post-COVID funk.
Asia manufacturing PMI: signs of regional divergence. Also in the news today.
China is at the centre of this split. Both the official manufacturing purchasing managers’ index (PMI) and a private survey were below the 50 mark that separates expansion from contraction, with the RatingDog China General Manufacturing PMI dropping to 49.9 in November from 50.6 in October, as output was flat and new orders slowed. While export orders improved after the trade truce with Washington in October, according to China’s November factory PMI report, domestic demand remained weak, and firms continued to cut jobs and inventories.
Japan’s contribution to the Asia manufacturing PMI story was hardly any cheerier. The S&P Global Japan Manufacturing PMI inched up to 48.7 in November from 48.2 in October, marking a fifth consecutive month of contraction, as new orders remained weak and declines were reported for intermediate and investment goods. However, output for consumer goods turned up slightly. As shown in Japan’s November PMI report, factories also saw increases in input costs for labour and materials, leading some to raise selling prices even as overall business sentiment for the year ahead improved amid expectations of a new fiscal stimulus package.
South Korea, another major electronics and auto exporter, continued to see its index contract for a second month, with the manufacturing PMI at 49.4 in November after dropping below 50 in October. South Korea’s most recent PMI survey showed production and new orders both declining, as margins tightened under U.S. tariffs and volatile input prices. In contrast, a new U.S.-Korean trade deal, minus some duties, came into effect, with chips and autos still being exported in large volumes. Between them, the big North Asian economies are helping hold down headline Asia manufacturing PMI readings, even as some pockets of strength surface elsewhere.
ASEAN factories buck the trend
By contrast, ASEAN remains the region’s shining star. Factories across seven Southeast Asian economies expanded at one of their fastest paces on record in November, with S&P Global’s regional manufacturing PMI climbing to 53.0 from 52.7 a month earlier — comfortably above the neutral 50 line and buoyed by strong output and new orders gains in Indonesia, Malaysia, Myanmar, the Philippines, Singapore, Thailand and Vietnam. Firms increased purchases and hired for a third month, even though they remained cautious about long-term costs, according to a recent Finimize summary of the ASEAN PMI data.
This ASEAN outperformance in the wider Asia manufacturing PMI landscape reflects both resilient domestic demand and a structural shift in supply chains as multinationals leave China to diversify production. Analysts say electronics makers, consumer goods groups and car parts suppliers in the bloc are deepening their integration into global value chains. At the same time, moderate input and output price pressures will help keep the region competitive. That resilience, though, is not proof against decelerating U.S. and European spending, which remains a main driver of ASEAN export growth.
Trade policy tailwinds, demand headwinds
For policymakers, the November readings underscore a vexing gap: While tariff relief and new trade deals for the United States have lifted some clouds of uncertainty, that has yet to translate into a broad-based rebound in orders. The Reuters cross-border poll underscores that Asia’s exporters are continuing to struggle with U.S. President Donald Trump’s trade policies – despite official pronouncements of trade truces and bilateral deals agreed upon by their countries, such as Japan, South Korea and China. “This means that while the recent fall in tariffs offered a brief lift to sentiment, Asia manufacturing growth [was] likely to slow again on cooling global demand” towards the second half of 2025, they said in an analysis of ING Economics also reached a similar conclusion earlier this year, with commentary on China’s slightly stronger June 2025 PMI at that time is consistent with today’s view.
The most recent Asia manufacturing PMI prints also fit into a broader story of bumpy post-pandemic recoveries. China’s factories have repeatedly slipped in and out of contraction since at least mid-2023, when a Reuters report on China’s factory slowdown found that weak external demand and a faltering property sector were weighing on output. A year later, I read news about global PMIs showing Asia’s factory activity hit by soft demand and uncertainty, including coverage late last year that warned of weak global demand, which could “remain weak” and continue weighing on the region.
In that context, the divergence in November — China, Japan and Korea weakness, ASEAN and India resilience — points to possible further swings in Asia’s manufacturing PMI gauges into early 2026 unless demand from richer economies improves. Unless U.S. and European consumers stop tightening their belts, even tariff relief and stimulus at home might not prevent further soft patches in Asia’s factories. On the other hand, any sustained rebound in electronics, autos, and consumer goods orders could soon feed through to higher PMI readings across the region, as lean inventories and cautious hiring left manufacturers poised to react.
