Uncertainty over tariff risks muddy global outlook for factories: Survey

Worries over future US tariffs are clouding the outlook for factories across much of Asia and Europe, according to surveys released on Tuesday which nonetheless showed some were able to shrug off the uncertainty and keep growing.

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Among the bright spots, Japan’s manufacturing read-out showed growth for the first time in 13 months, South Korea's activity contracted at a milder pace and China’s Caixin PMI index also expanded in June - confounding an official survey that showed activity shrinking for a third straight month.

In Europe, Ireland, Spain and the Netherlands were among the star performers even as the wider Eurozone read-out was broadly flat and Britain continued to contract, albeit more slowly.

Analysts said the underlying softness in surveys highlights the challenges facing businesses and policymakers as they try to navigate US President Donald Trump's moves to shake up the global trade order with sweeping tariffs.

"We must recognise that the external environment remains severe and complex, with increasing uncertainties,” said Wang Zhe, economist at Caixin Insight Group. The Caixin/S&P Global survey showed Chinese manufacturing PMI rose to 50.4, surpassing expectations in a Reuters poll.

Japan's final au Jibun Bank PMI rose to 50.1 due to an upswing in output, but overall demand remained weak as new orders shrank on concern over US tariffs.

Factory activity in South Korea contracted for the fifth straight month though the pace of decline eased on relief over a snap presidential election on June 3 that ended six months of uncertainty.