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Global Manufacturing PMI: In Nov, US-China Recover, Europe Contracts
The United States, China, Japan, and the Eurozone have all released their November manufacturing data, revealing a continued divergence in global manufacturing performance. The U.S. and Eurozone Manufacturing PMIs remain in contraction territory, though the U.S. has shown signs of recovery with improvements in new orders and production indices.
In Asia, China sustained its expansion, driven by stimulus policies and export front-loading effects. Japan, on the other hand, experienced its fifth consecutive month of contraction due to overcapacity in the automotive and semiconductor sectors. Meanwhile, South Korea returned to expansion, supported by robust external demand.
United States Manufacturing PMI: Persistent Contraction with Partial Recovery in Demand Post-Election
The U.S. manufacturing sector remained in contraction, with the November ISM Manufacturing PMI registering at 48.4 (previous: 46.5). The improvement was driven by higher readings in new orders (50.8, previous: 47.1), production (46.8, previous: 46.2), and inventories (48.1, previous: 42.6), reflecting a partial recovery in demand following the presidential election. However, the customer inventories index edged up to 48.1 (previous: 46.8), indicating limited improvement in end-user demand.
Sectoral performance remained notably uneven, with only three of the 14 manufacturing industries—Food, Beverage & Tobacco, Computer & Electronic Products, and Electrical Equipment—showing growth. Computer & Electronic Products continued to benefit from robust AI-driven demand, with sustained increases in new orders, production, and backlog.
The U.S. Manufacturing Remains in Contraction, but Electronics Sector Supporting a Rebound in New Orders
China Manufacturing PMI: Two Consecutive Months of Expansion, Policy Stimulus and Export Rush in Focus
China’s November Manufacturing PMI stood at 50.3 (previous: 50.1), slightly exceeding market expectations and marking the second consecutive month of expansion. The data reflects the continued growth in new orders at 52.4 (previous: 52.0) and the production index at 50.8 (previous: 50.0), likely supported by policy stimulus and holiday sales.
However, the rise in new export orders to 48.1 (previous: 47.3) may largely be attributed to a preemptive export surge following Donald Trump’s election as U.S. president. This effect has likely contributed to the sustained expansion in new orders and production. Future observations will be necessary to assess whether the recovery in demand is sustainable.
China’s Manufacturing Activity Expands for the Second Consecutive Month Amid Policy Stimulus
Euro Area Manufacturing PMI: Intensified Contraction Amid Weak Demand and Political Instability
The eurozone’s November Markit PMI dropped to 45.2 (previous: 46.0), highlighting worsening conditions in new orders, production, and inventories. Employment recorded its steepest decline since August 2020, while output prices fell sharply due to weakening demand.
- Germany: Continued inventory liquidation and geopolitical uncertainty weighed on new orders and production. Employment and backlog declined further, while competitive pressures drove output prices to their fastest decline in 15 years.
- France: Weak domestic and external demand caused new orders to fall at the fastest pace in four years. Manufacturers reduced inventory replenishment to preserve cash flow, while sharp competition resulted in the steepest output price decline in eight years.
- Italy: Domestic demand weakness and political uncertainty from Germany and France dampened new orders and production. Employment cuts reached a four-year high, while backlogs shrank at the fastest pace in 15 years.
Japan Manufacturing PMI: Contracting for Five Consecutive Months, Reflecting Excess Production & Weaken Demand
Japan Manufacturing PMI stood at 49.0 (previous: 49.2) in November, marking the fifth consecutive month in contraction territory. This was mainly due to declining domestic and international demand, as well as overcapacity in the automotive and semiconductor sectors, leading to reductions in new orders and production activity. In terms of pricing, despite the slowdown in demand, inflation-driven operating cost pressures intensified, pushing output prices to their highest level since July.
Korea Manufacturing PMI: Strong External Demand Drives Recovery in New Orders
Korea’s manufacturing PMI rose to 50.6 in November (previous: 48.3), reflecting strong external demand that ended three consecutive months of contraction in new orders and helped ease the contraction in production. On pricing, while input costs continued to rise, companies opted to absorb these increases to maintain competitiveness, resulting in a third consecutive month of declines in output prices.
Summary
In November, global manufacturing performance exhibited significant divergence. U.S. manufacturing remained in contraction but showed signs of partial recovery in new orders and production as election-related uncertainties diminished. However, sectoral performance remains uneven, and broader recovery momentum is limited.
China’s manufacturing sector expanded for the second consecutive month, buoyed by policy stimulus and holiday demand. However, the increase in export orders may indicate that some of the new orders and production were influenced by a rush to export. The sustainability of the demand recovery remains subject to further observation.
Europe’s manufacturing sector faced accelerated contraction due to weak domestic demand, intensified competition, and political instability. Major economies such as Germany, France, and Italy experienced broad-based declines in new orders, production, employment, and output prices. Short-term recovery appears unlikely.
Japan experienced its fifth consecutive month of contraction due to weakening domestic and external demand and overcapacity in production. Meanwhile, South Korea returned to expansion, driven by strong external demand that boosted growth in new orders.