Manufacturing weakens in Europe, Asia on faltering demand, tariff woes

Manufacturing was weak in Europe and Asia’s biggest economies in November, business surveys showed on Monday, as subdued domestic demand and tariff uncertainties weighed.

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The euro zone, China and Japan all saw manufacturing activity contract last month although there were bright spots for Britain and economies in Southeast Asia, which saw growth, purchasing managers’ surveys showed.

Euro zone manufacturing activity slipped back into contraction territory last month, its purchasing managers’ index (PMI) showed, and Germany's dominant manufacturing sector experienced a marked deterioration in business conditions.

While weakening demand in the euro zone forced firms to cut jobs at the quickest rate in seven months, in Germany new orders fell at the fastest rate in IO months.

“Current conditions remain at best subdued, with output trending down from an already weak level, reflecting the combination of headwinds faced by the manufacturing sector, including tariffs, heightened Chinese competition and general economic uncertainty,” noted Leo Barincou, senior economist at Oxford Economics.

“The persistent industrial slump appears to be putting pressure on headcount, with firms shedding jobs at the fastest pace since April. Mean while, weak demand means that firms were unable to transmit the rise in input costs to their selling prices.”

In China, the world’s largest manufacturer, factory activity slipped back into a slight contraction, a private-sector PMI showed, a day after Beijing's official measure showed activity falling for the eighth consecutive month albeit at a slower pace.