Asia's factory activity feels fading glimmer of AI boom
SPY•Factory activity expanded in October but slowed in China, Japan, South Korea and Taiwan, surveys showed. The IMF projected Asia's growth at 4.8% in 2026 and 4.4% in 2027, down from 5.0% in 2025.
1. Factory growth slows
Manufacturing activity across Asia continued to expand in October, but growth slowed in major chip exporters, private surveys showed. The data points to strains on export-led economies as elevated fuel and food prices weigh on consumption and business confidence, even as demand for chips and AI-related goods remains resilient.
2. Regional survey results
China's RatingDog manufacturing PMI fell to 52.0 from 52.1 in September, while Japan's PMI eased to 53.3 from 54.1, South Korea's fell to 51.3 from 53.9, and Taiwan's declined to 54.9 from 56.7. All remained above the 50 mark that separates growth from contraction. Vietnam, Indonesia and Malaysia recorded faster factory activity growth.
3. Growth risks ahead
The IMF projected Asia's economy to grow 4.8% in 2026 and 4.4% in 2027, slowing from 5.0% in 2025. It warned of risks from the Iran war-induced energy shock and a potential correction in the AI boom.
