Global Manufacturing Slump: Impact of Tariffs and Weak Demand
Factory activity declined globally due to weaker demand in China and U.S. tariffs, with Eurozone manufacturing contracting. The PMI fell widely, especially in Asia, highlighting challenges from policy changes and reduced exports. Indications are that central banks in Asia may need to ease policies further.
Factory activity across the globe witnessed a decline last month, with private surveys indicating a slowdown in growth exacerbated by President Donald Trump's tariffs and weak Chinese demand. The Eurozone's manufacturing sector, marked by a dip in new orders, slipped back into contraction.
The HCOB Eurozone Manufacturing Purchasing Managers' Index (PMI) dropped to 49.8 in September, suggesting a fragile recovery in the industrial sector. Countries like the Netherlands bucked the trend, showing expansion, while major economies like Germany, France, and Italy registered contractions.
In Asia, manufacturing shrank, reflecting the adverse effects of U.S. tariffs. Japan and Taiwan reported decreasing activity, with China's persistent slump highlighting ongoing challenges. Survey readings suggest continued struggles for the region's manufacturing, potentially prompting further policy easing by central banks.
(With inputs from agencies.)
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