Factory activity across much of Asia expanded in September on strong demand for semiconductors and artificial intelligence-related goods, although Malaysia and the Philippines recorded contractions, according to private surveys.
South Korea saw the strongest improvement among the region’s major export economies, with its manufacturing purchasing managers’ index (PMI) rising to 53.9 in September from 52.3 in August, its highest level since May.
The index remained above the 50-point mark separating expansion from contraction for a 10th consecutive month, with export demand growing at its fastest pace in 15-and-a-half years.
“Both new orders and production growth hit the highest for around five-and-a-half years, with anecdotal evidence often linking the expansions to the combined strength of the semiconductor and automotive sectors,” said Usamah Bhatti, economist at S&P Global Market Intelligence.
Taiwan also benefited from the global AI boom, with its PMI rising to 56.7 from 54.7 in August as demand for AI-related products continued to support manufacturing activity.
Japan’s manufacturing PMI, meanwhile, eased to 54.1 from 54.9, marking the weakest pace of expansion in six months as output and new orders slowed.
However, overseas demand for Japanese goods remained firm, with new export orders rising for a ninth consecutive month on stronger demand from Asia and improved sales to the US.
Japanese manufacturers continued to face cost pressures, with companies raising selling prices at one of the sharpest rates since late 2022.
Elsewhere, factory activity expanded in Indonesia and Vietnam but contracted in Malaysia and the Philippines.
The latest surveys followed data showing China’s factory activity returned to growth in September as weather disruptions eased and factories resumed operations.
The broader improvement across Asian manufacturers provides some support to policymakers as renewed energy price increases threaten to add to inflationary pressures linked to the US-Israeli war on Iran.
Reuters
