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Major manufacturing economies struggled to gain traction in October as weak US demand and ongoing tariffs under President Donald Trump continued to hurt global factory orders. The euro zone's factory output stagnated, with Germany, France, and Italy seeing declines, while Spain recorded mild growth. China's economy lost momentum, with manufacturing growth slowing and export orders falling. South Korea also faced contraction, while India stood out with robust domestic demand. Although the US and China agreed to delay tariffs, the trade tensions still cast a shadow on global manufacturing.
Global manufacturing activity remained subdued in October, reflecting the impact of weak US demand and tariff-related disruptions on factory orders. The latest business surveys showed that industrial output in major economies, including those in Europe and Asia, struggled to regain strength despite some improvement in domestic markets. Advertisement
In the euro zone, factory activity showed little to no expansion as new orders stagnated and employment levels dropped, according to the region's manufacturing PMI. Germany, the bloc's largest industrial economy, continued to show signs of weakness with slower production growth. The VDMA engineering association reported a sharp decline in German engineering orders during September, highlighting the sector's ongoing struggles. France's manufacturing sector remained soft, while Italy recorded a marginal contraction. Spain, however, performed better than its peers, with factory activity expanding slightly faster than in September.
An analyst from Oxford Economics noted that overall euro zone growth was being sustained mainly by domestic demand, while new export orders continued to reflect weak external conditions-particularly from France and the United States.
In the United Kingdom, manufacturing posted its strongest performance in a year, largely due to the resumption of production at Jaguar Land Rover after a cyberattack had halted operations. However, economists cautioned that the improvement was temporary and did not indicate a broader recovery in British manufacturing.
Across Asia, manufacturing results were mixed but generally pointed to weaker export performance. In China, private-sector data showed factory activity growing at a slower pace, while official data confirmed a seventh consecutive month of contraction. Export orders declined, suggesting that the earlier rush to ship goods before US tariffs took effect had fully faded. Analysts said the slowdown indicated a loss of momentum in China's economy, with softer growth seen across both manufacturing and construction sectors.
South Korea also faced declining factory activity in October, with export orders slipping amid trade uncertainty. Despite some progress in trade discussions during Trump's visit to Asia, exporters in both China and South Korea remained cautious about the outlook for US demand.
Trade data from September showed China's exports rising faster than anticipated, but the increase was mainly driven by new markets as shipments to the US dropped 27% year-on-year. Meanwhile, policymakers in Beijing continue to monitor whether China's USD 19 trillion economy is on track to meet its 2025 growth target of around 5% without introducing further stimulus measures.
Trump and Chinese President Xi Jinping recently agreed to de-escalate trade tensions by delaying reciprocal tariffs for a year. While the move offered some relief, economists believe it does not address the underlying divide between the world's two largest economies. Similarly, South Korea's newly negotiated trade deal with the US helped reduce tariffs on Korean goods but was seen largely as a compromise to maintain competitiveness in global trade.
India's manufacturing sector provided a contrasting picture, showing strong expansion supported by domestic demand that helped offset weaker exports. Among other Asian economies, Malaysia and Taiwan experienced further declines in manufacturing output, while Vietnam and Indonesia reported moderate growth as regional supply chains continued to adjust.
Source Reuters
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