India loses top manufacturing spot as PMI falls to nine-month low

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India ceded its position as the world’s fastest-growing major manufacturing economy in November, as factory activity cooled more sharply than expected. The HSBC Manufacturing Purchasing Managers’ Index fell to 56.6 — a nine-month low — from 59.2 in October, marking one of the steepest month-on-month declines in the region. Although still firmly in expansion territory, the drop was enough for Thailand to overtake India at the top of the global PMI rankings.

Thailand’s PMI rose to 56.8, its strongest reading in more than two-and-a-half years, supported by improving business sentiment and expectations of better economic conditions in the months ahead. The November data also reflected a broader shift across global manufacturing: activity slowed across most Western economies and China, even as pockets of resilience emerged in the UK, Australia and parts of Southeast Asia.

Across ASEAN, manufacturing strengthened for a third straight month, with the bloc’s PMI rising to 53 — the third-fastest improvement in the survey’s history. Malaysia returned to expansion for the first time in over three years, while Vietnam and Indonesia posted solid gains, helped by improved supply conditions and optimism around future orders. The Philippines remained an outlier, slipping to its weakest level since 2021 as new orders contracted, though firms there reported a sharp rise in confidence tied to expected new projects and a broader customer base.

China’s manufacturing sector slipped back below the 50-mark amid weaker new business flows, but sentiment improved on expectations of policy support and new product launches. Japan and South Korea stayed in contraction, though both recorded firmer optimism for the year ahead.

The picture in the West was similarly subdued. The eurozone fell to a five-month low of 49.6, even as manufacturers reported their strongest expectations since June. The US PMI eased to 52.2, but firms signalled the highest confidence levels in months, citing planned investments and government spending. The UK, meanwhile, returned to expansion for the first time in 14 months, with a PMI of 50.2 driven by improving demand and better business confidence. Australia also surprised on the upside, climbing to a three-month high of 51.6.

For India, the slide in business optimism was notable. Sentiment fell to its lowest level in nearly three-and-a-half years, with survey respondents citing concerns about rising competition — particularly from global players — even as most remained confident that output would continue to grow over the next 12 months.

Globally, the manufacturing PMI slipped slightly to 50.5. Business expectations improved to a five-month high, but remained below their long-run average for the twentieth consecutive month. Thailand, Brazil and Colombia were among the most optimistic worldwide, with the UK and US also ranking near the top.