India Loses Top Manufacturing Spot as PMI Drops to Nine-Month Low

India’s manufacturing sector lost momentum sharply in November, slipping from its position as the world’s fastest-growing major manufacturing economy. The latest HSBC Manufacturing Purchasing Managers’ Index (PMI) showed a steeper-than-expected decline, signalling that factory output cooled substantially after months of robust growth.

The PMI dropped to 56.6 in November, a nine-month low, compared with 59.2 in October, marking one of the steepest month-on-month falls across major economies in the region. While a reading above 50 still indicates expansion, the slowdown was significant enough for Thailand to overtake India and claim the top spot in global PMI rankings.

Thailand Surges Ahead With Best PMI in 2.5 Years

Thailand’s manufacturing sector experienced one of its strongest expansions in more than two and a half years. The country’s PMI rose to 56.8, slightly above India’s 56.6, pushing it to the number one position globally in November.

The improvement in Thailand was supported by better business sentiment and growing confidence in improving economic conditions over the coming months. This shift marks a notable development in Asia’s manufacturing landscape, especially at a time when several major global manufacturing hubs are experiencing widespread deceleration.

Global Manufacturing Sees Mixed Signals

The November PMI trends reflected a broader cross-continental shift in factory activity. Most Western economies and China saw their manufacturing indicators weaken, suggesting muted demand, slower orders and softer production cycles.

However, the data also revealed selective pockets of resilience, especially in the UK, Australia and parts of Southeast Asia, which posted relatively stronger gains compared to their global peers. This divergence underscores how manufacturing recovery remains uneven worldwide.

ASEAN Manufacturing Expands for Third Straight Month

Across Southeast Asia, manufacturing activity strengthened for the third consecutive month. The ASEAN region’s PMI rose to 53, marking the third-fastest improvement in the history of the survey.

Several economies within the bloc posted solid growth:

• Malaysia returned to expansion after more than three years of contraction, signalling a significant turnaround.

• Vietnam and Indonesia reported steady gains, supported by improving supply conditions and heightened optimism around future orders.

These results indicate that regional supply chains are becoming more stable, and confidence is building as businesses anticipate better demand in early 2025.

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Philippines Slips but Business Confidence Jumps

The Philippines remained an outlier within ASEAN, with its PMI falling to its weakest level since 2021. The drop was driven by contracting new orders, reflecting subdued demand trends in the domestic and export markets.

However, firms in the Philippines reported a sharp rise in confidence, backed by expectations of new projects and hopes of a broader customer base emerging in the coming months. The improvement in sentiment signals potential recovery pathways despite the current slowdown.

China Dips Below 50, But Optimism Grows

China’s manufacturing sector slipped back below the neutral 50-point mark, indicating a contraction in activity. The decline was attributed to weaker new business flows, reflecting ongoing demand softness and cautious ordering behaviour.

Despite the contraction, sentiment improved as firms anticipated policy support and new product launches to stimulate activity going forward. The rise in confidence suggests that manufacturers expect stronger conditions ahead, even though short-term pressures persist.

Japan and South Korea Stay in Contraction

Both Japan and South Korea remained in contraction territory in November. Although factory activity in these countries has not yet crossed the 50-point threshold, they recorded firmer optimism for the year ahead.

Manufacturers in both economies are anticipating better market conditions, improved demand flows, and potentially stronger regional trade links as supply chains stabilise across Asia.

What Does India’s PMI Slide Mean Going Forward?

For India, the steep drop from 59.2 to 56.6 highlights a cooling phase in manufacturing momentum after months of stronger performance. Although the index remains comfortably in expansion, the pace of growth has moderated sharply.

The decline also comes at a time when other Asian economies—particularly Thailand, Malaysia and Vietnam—are seeing renewed manufacturing strength. India losing the top spot underscores how competitive the regional manufacturing landscape has become, especially as global demand remains uneven.

The fall to a nine-month low serves as a reminder that India’s manufacturing expansion, while resilient, is not immune to broader global shifts in demand, supply conditions, and sentiment. Still, the PMI remaining well above 50 suggests that growth continues—just at a slower and more cautious pace.

As manufacturing remains a critical pillar of economic growth, investors, policymakers and industry leaders will be closely watching upcoming PMI releases to gauge whether India can regain its momentum and return to the top of global rankings.

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