Overall manufacturing continued to improve, while transport equipment and machinery manufacturing fell 2.1 points in September. Persistently high raw material costs and a decline in automotive parts manufacturing are cited as the causes, with regional differences also emerging.
While sentiment across the manufacturing sector improved for the fifth consecutive month, transport equipment and machinery manufacturing, including automotive-related manufacturing, fell 2.1 points month on month in the September DI. Persistently high raw material costs and a decline in automotive parts manufacturing have been cited as the main causes.
These results suggest that while demand for AI- and semiconductor-related machinery is driving the overall figure higher, differences are emerging by region as well as in where demand is directed, rather than being limited to automotive parts.
The report points out that assessing whether the automotive parts industry is in long-term decline requires a comprehensive view of multiple factors, including when the cost burden will ease, when orders will recover and how far price pass-through has progressed.
The bifurcation of the demand environment could affect regional economies going forward, and the investment appetite of parts makers and trends in equipment upgrades are expected to be the focus, according to reports.