Asia-Pacific Factory Output Weakens Amid Trade Strains

Factory activity across major Asia-Pacific economies remained subdued in June 2025 as global trade tensions and weak domestic demand persisted. China's official manufacturing PMI rose slightly to 49.7, marking a third straight month of contraction despite government stimulus and a temporary tariff truce with the U.S. The country's steel sector continued to weaken, and exports to the U.S. dropped sharply, while deflation and falling industrial profits pressured manufacturers. In South Korea, the manufacturing PMI improved to 48.7 but stayed in contraction, with political stability aiding sentiment despite soft export orders. Australia's manufacturing PMI dipped to 50.6, its lowest since February, as both domestic and export demand weakened, influenced in part by U.S. trade policies. Overall, the region faces ongoing challenges from external economic headwinds and sluggish consumer spending.