Asian factory activity expands amid global AI boom
South Korea's export demand grew at its fastest pace in 15½ years in September.
On October 1, private surveys revealed that factory activity across Asia expanded in September, driven by the global AI boom, providing some relief to policymakers worried about cost pressures stemming from the US-Israeli war on Iran. While energy price hikes added uncertainty to the global economic outlook, export leaders Japan, South Korea, and Taiwan experienced manufacturing activity growth fueled by strong demand for chips and AI-related products.
China's factory activity also grew in September, according to September 30 surveys, as favorable weather conditions enabled factories to resume operations. South Korea saw its factory activity rise at the highest rate in four months in September, as export demand surged at the fastest pace in 15½ years. Usamah Bhatti, an economist at S&P Global Market Intelligence, cited the strength of South Korea's semiconductor and automotive sectors, noting that both new orders and production growth hit their highest levels in five and a half years.
South Korea's purchasing managers' index (PMI) for September stood at 53.9, up from 52.3 in August and the highest level since May. The index remained above 50, indicating expansion, for a 10th consecutive month. Taiwan also benefited from the global AI boom, with its PMI reaching 56.7 in September, up from 54.7 in August. In Japan, the S&P Global PMI was 54.1 in September, marking the weakest pace of expansion in six months due to slowed output and new orders, despite overseas demand remaining robust.
Not all Asian economies reported positive trends. Indonesia and Vietnam experienced growth, while the Philippines and Malaysia contracted.
Written by urgent.news from Straits Times Business's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
