India’s factories defied global headwinds in August, with the manufacturing PMI climbing to 59.3, its highest since late 2008. India was not alone. Most developing economies in Asia also posted gains in factory activity.
India’s momentum was supported by resilient domestic demand and improved pricing power. China’s PMI returned to expansion at 50.5, up from 49.5 in July. The 50-mark separates expansion from contraction.
Elsewhere in Asia, Malaysia touched a 15-month high, Thailand reached a 13-month peak, and Indonesia hit a five-month high.
By contrast, advanced economies continued to struggle. The UK posted yet another sub-50 reading, extending its downturn. Japan and South Korea improved slightly but remained in contraction territory. The eurozone, however, offered a rare bright spot. Factory output rose to 50.7, a 41-month high, likely helped by its recent trade agreement with the US.
Not all emerging markets bucked the trend either. Pakistan’s PMI slipped to 50.1, its weakest since surveys began in May 2024, while Brazil—like India, facing a steep US tariff of 50 percent—fell to its lowest level since mid-2023.
The resilience in Asia was accompanied by a rebound in optimism.
Indian business confidence bounced back from a three-year low, with firms signalling faith in future demand despite US tariff pressures.
“Overall orders growth held up much better, suggesting that domestic orders remained robust, helping to cushion against tariff-related drag on the economy. Manufacturers’ continued optimism for future output is a positive sign,” said Pranjul Bhandari, chief India economist, HSBC.
In China, confidence among producers rose to its highest since March, while sentiment in the Philippines improved to its strongest since last November.
Developed markets, meanwhile, continued to face clouds of uncertainty. There was little change in sentiment in the Eurozone area, and the outlook remained clouded in the UK as well.
“The outlook for the sector remains very uncertain. With manufacturers fearing that possible government policy decisions, including potential tax increases, could further hurt competitiveness, the upcoming Budget will likely prove very important,” said Rob Dobson, Director, S&P Global Market Intelligence, commenting on the UK PMI release on September 1.
Japanese manufacturers were the least confident in the year-ahead outlook in the past three months.
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