Asia's factory activity feels fading glimmer of AI boom
SPY•Factory activity expanded in Asia in October, but growth slowed in China, Japan, South Korea and Taiwan as higher fuel and food prices weighed on consumption and confidence. The IMF expects Asia's economy to grow 4.8% in 2026 and 4.4% in 2027, down from 5.0% in 2025.
1. Factory growth slows
Private surveys showed manufacturing activity continued to expand in October but slowed in China, Japan, South Korea and Taiwan. The article said higher fuel and food prices linked to the prolonged Middle East conflict are straining export-led economies even as demand for chips and AI-related goods remains resilient.
2. Regional readings
China's RatingDog manufacturing PMI eased to 52.0 from 52.1 in September, while Japan's fell to 53.3 from 54.1, South Korea's to 51.3 from 53.9, and Taiwan's to 54.9 from 56.7. Vietnam, Indonesia and Malaysia recorded faster factory expansion; India's manufacturing growth slowed as domestic demand and hiring weakened, partly offset by stronger export orders.
3. Growth outlook
The IMF projected Asian economic growth of 4.8% in 2026 and 4.4% in 2027, compared with 5.0% in 2025. It warned of risks from an energy shock caused by the Iran war and a potential correction in the AI boom.
