June PMI data shows AI demand powering Asian factories amid global divide

China's Caixin manufacturing PMI hit 51.7 in June, a seventh straight month of expansion, with high-tech manufacturing at 53.5 on AI hardware demand, according to Reuters.wtvbam+1
The eurozone PMI slipped to a four-month low of 51.3, Spain fell back into contraction, and Germany's composite output index weakened further.trade+1
India's HSBC manufacturing PMI eased to 54.2 from 55.0, the second-weakest reading since mid-2022, as domestic and export demand softened.fortuneindia

Manufacturing surveys released on Tuesday painted a split picture of global industry at mid-year, with Asian factories riding a wave of artificial-intelligence hardware demand while parts of Europe and emerging markets struggled with rising energy costs tied to the Iran conflict.

Asia Powers Ahead on Tech Demand

China's private-sector Caixin manufacturing PMI came in at 51.7 in June, extending the sector's expansion streak to seven consecutive months and capping what analysts called its strongest quarter since late 2020. The official National Bureau of Statistics gauge rose to 50.3 from 50.0 in May, with high-tech equipment manufacturing posting a reading of 53.5 as demand for AI-related chips and servers surged.mql5+2

Japan's au Jibun Bank manufacturing PMI rose to around 54.9, marking a sixth straight month of expansion. Reuters reported that the global AI boom powered Asia's manufacturing sector in June, with "brisk demand for technology-related goods offsetting the drag from the Iran war". MarketWatch News Corp noted that factory activity gauges across much of Asia rose to close out the first half, driven by artificial-intelligence hardware demand.tradingeconomics+3

India's HSBC manufacturing PMI fell to 54.2 in June from 55.0 in May, marking the second-weakest reading since mid-2022, as softer domestic and overseas demand weighed on output and new orders. HSBC Chief India Economist Pranjul Bhandari said the data signalled "continued expansion but at a slower pace," noting that "both input and output price indices declined, indicating softer inflationary pressures as geopolitical disruptions began to ease".fortuneindia+1

Europe Holds Expansion, but Unevenly

The Eurozone manufacturing PMI edged down to a four-month low of 51.3 in June from 51.6 in May, remaining in expansion territory for a fifth consecutive month. Spain's manufacturing sector slipped back into contraction at 49.7, down from 51.2 in May, while the flash reading for Germany's composite output index weakened.tradingeconomics+3

The UK manufacturing PMI held at 53.1, unchanged from the flash estimate and down from 53.9 in May, suggesting a cooling in momentum even as the sector remained in growth territory.investing

Emerging Markets Show Strain

Russia's manufacturing PMI stood at 48.8 in May after falling to 48.3 in March, with the sector remaining in contraction for over a year amid weak demand and high interest rates. South Africa's Absa PMI had eased to 50.8 in May from 52.6 in April, with further softening expected in June.tass+4

The divergence underscores a two-speed global manufacturing recovery: economies plugged into the AI supply chain are thriving, while those more exposed to energy costs and weak domestic demand continue to falter.

Sources (68)