Global and India’s factory activity slumps in September but Asia holds up

The global manufacturing PMI eased to 50.8 from 50.9 in August, pointing to a fragile recovery vulnerable to trade and geopolitical shocks.

Global factory activity slowed in September as weak demand and tariff headwinds weighed on output across the US, Europe, and India, according to S&P Global PMI surveys. The global manufacturing PMI eased to 50.8 from 50.9 in August, pointing to a fragile recovery vulnerable to trade and geopolitical shocks.

Asia Bucks the Trend

Asia’s export-oriented economies provided the main bright spot. Thailand led with a 28-month high PMI of 54.6, while South Korea climbed to a 13-month high at 50.7. The ASEAN bloc rose to 51.6, its strongest in over a year, supported by resilience in Vietnam and Indonesia, both steady at 50.4.

China’s PMI edged up to 51.2, a six-month high, on stronger new orders and stabilising exports.

Ratingdog noted that “better underlying demand conditions, promotional efforts and new product launches all supported the latest upturn in overall new business.” However, weaker export growth kept the pace below recent highs.

Vietnam saw its first uptick in export orders since March, though overall activity remained flat.

India Slows But Expands

India continued to expand but lost momentum, with PMI falling to 57.7, a four-month low.

"The September headline index softened, but it remained well above the long-term average. New export orders increased at a faster rate in September, indicating demand outside of the US might be offsetting any decline in demand from the US as a result of tariffs,” said Pranjul Bhandari, chief India economist, HSBC commenting on PMI numbers.

Western Slowdown

The slowdown was more pronounced in the West. US PMI slipped to 52 from 53 in August, still expansionary but slower. The Eurozone contracted again, falling to 49.8, while the UK sank to 46.2, its lowest in five months. Brazil posted a 27-month low at 46.5, underscoring how emerging markets outside Asia are also struggling.

Diverging Outlook

The country-level surveys reflect diverging global paths. In Vietnam, S&P reported that “stability in US tariff policies reportedly helped some firms to secure new business from abroad.” Mexico’s PMI at 49.6 showed export orders still falling, but at the slowest pace in 19 months.

“India registered the fastest rate of output expansion in September, while Thailand rose to second place in the growth rankings. Although Output PMI readings for the two largest industrial nations, China (52.0) and the US (52.4), were broadly similar, this represented a growth acceleration for the former but a slowdown in the latter,” said JP Morgan in its Global PMI release.

Asia’s resilience—anchored by export recovery and domestic demand—is cushioning the global slowdown, while Western economies struggle to maintain momentum.