Manufacturing activity in Japan slowed tremendously and layoffs are ongoing from wounded order books. India’s IT hardware market is expected to register a compound annual growth rate of 12.8% in the next four years on strong demand and rising domestic production.
Findings revealed the Japan’s manufacturing activity fell for the sixth straight month in November. The headline au Jibun Bank Flash Japan manufacturing purchasing managers’ index (PMI) slipped further to 48.1 this month from 48.7 in October, sliding below the 50.0 neutral mark that separates deterioration from expansion.
“Despite weaknesses in new orders, Japanese private sector companies mentioned that the level of outstanding business was unchanged, ending a four-month sequence of decline,” said Usamah Bhatti, economist at S&P Global, which compiled the survey. Japan’s purchasing managers index (PMI) registered its deepest contraction in November.
Early results of the survey showed manufacturers are catching up with their backlogs fast as pressure on capacity softens, prompting them to reduce staff levels for two months in a row. Firms were also hit by the weak Yen, high materials, fuel and labour costs, which affected manufacturing.
India on the other hand enjoyed growth — India’s IT hardware market is expected to register a compound annual growth rate of 12.8% in the next four years on strong demand and rising domestic production, according to Fitch Solutions. The firm estimated the country’s IT hardware industry to grow to US$104 billion by 2027 and still dominate the overall IT market with a 53.5% market share, it said in a 22 November note. Fitch also noted the country’s above-average risk/reward index profile as a main appeal for tech firms reconfiguring their supply chains, considering the severe blow of US chip export restrictions to China currently.
“A large addressable market of consumers and a trend of tech companies looking to re-route their supply chains due to geopolitical risks makes us believe India’s consumer electronics market will outperform its regional peers,” it said. Setting up shop in the country also allows companies to tap both the domestic and Southeast Asian markets, it added.
Fitch sees domestic manufacturing gathering momentum in the near term after about 27 electronics manufacturers made INR30 billion (US$360 million) in fresh investments recently, while the government continues to incentivise companies to boost domestic production.
Data from Statista.com revealed the value of trade between India and the ASEAN region amounted to over US$110 billion in fiscal year 2022. The largest portion of this trade came from Singapore, valued at over US$30 billion. Comparing both nations, it is of no surprise conditions in India contributed to the country’s export performance including exchange rate.
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