Global Manufacturing Slowdown Intensifies Amidst Geopolitical Risks

Global manufacturing activity displayed a mixed picture in March, with a slowdown becoming increasingly evident across several key economies. While South Korea saw a surge in exports, driven by strong semiconductor demand (up 48.3%, a four-decade high), many other regions experienced weakening factory output. Asia, including China, Indonesia, Vietnam, Taiwan, and the Philippines, reported slower growth, largely attributed to rising fuel costs and uncertainty stemming from the conflict in the Middle East. Germany’s manufacturing sector expanded at its fastest pace since May 2022, but this was partially due to lengthened supply chains and record input cost inflation. France’s manufacturing stagnated, with orders being postponed or cancelled due to the geopolitical situation. China’s factory activity growth moderated, with rising costs impacting momentum. Russia’s manufacturing sector contracted at its fastest pace this year. Japan saw improved business sentiment among large manufacturers, but expectations for the next three months are pessimistic. Pakistan’s manufacturing growth slowed due to high inflation. Overall, the global manufacturing slowdown is being exacerbated by supply chain disruptions, escalating energy prices, and dampened business confidence.