Key Takeaways:
- Recent Manufacturing PMI surveys across the US, Europe, Japan, Korea, and Taiwan indicate a significant structural slowdown, marking a ninth consecutive month of contraction in the US. The widening gap between factory output and industry absorption signals that global production is turning more slowly than expected.
- While China’s trade surplus exceeded $1 trillion for the first time in November, analysis suggests this is a supply-side maneuver, not a demand resurgence. Exports to the US dropped sharply (nearly 30% year-on-year), indicating China is redirecting excess capacity to new markets, likely through competitive pricing, to clear stock rather than meeting genuine synchronous global demand.
- Fashion enters its planning cycle in an environment where upstream output is slower, consumer spending is cautious and the usual signals arrive with less clarity. The value of technology rises in these conditions because it helps reduce avoidable risk when the wider backdrop gives away little.
According to data from wide-reaching manufacturing surveys, the production economies in Europe, Japan, Korea and Taiwan slid deeper into contraction last month. New order volumes have continued to decline, inventories have crept upward, and, perhaps most tellingly, the gap between what factories are producing and what downstream sectors are willing to absorb has widened in a way that might suggest the early stages of a structural slowdown.
This would be noteworthy at any point, but it lands at a time when global supply chains are still working through several years of uneven conditions, and when they are operating under a trade policy and regulatory environment that feels capricious to say the least. The upshot of this unpredictability is elasticity in demand and supply in a way that manufacturing sectors are not really set up to absorb. As we’ve heard from experts across the industry time and time again, brands, retailers and suppliers have had to adjust to these fluctuations as part of the normal backdrop rather than as temporary disruptions, and this same shift is being passed upstream.
The results are visible quickly: the latest PMI readings in the US confirmed a ninth month of contraction, Europe’s surveys mirrored the same hesitant decline, and Asia offered little respite. All of which is to say that as we close out the year, the machinery of global production is turning more slowly over time.
Then, into this narrative of weakening demand, came a headline that seemed to pull in the opposite direction. China’s exports rose in November, enough to push its trade surplus above a trillion dollars for the first time. Exports to the United States dropped sharply (almost 30% down year-on-year) yet shipments to Europe, Southeast Asia, Africa and Latin America grew strongly enough to offset the plunge. For a moment, this looks like evidence that global demand is still there, resurfacing in different geographies. A convenient counterweight to the stories of slowdown we’re witnessing elsewhere.
Except it probably isn’t.
The more closely you examine the underlying data, the more the rebound resembles a supply-side manoeuvre rather than a demand-side resurgence. China’s own manufacturing surveys remain muted. Domestic consumption is subdued to the extent that the government this week came out and reiterated a need to address it with renewed importance. Imports have not followed the trajectory of exports and, according to the European Central Bank, have remained significantly below their pre-pandemic trend, a divergence that would be difficult to square with a genuine synchronous upswing in global demand.
At the same time, there is credible recent evidence that China’s export prices have declined throughout 2025, a pattern more consistent with competitive margin sacrifice than global demand.
This isn’t the profile of a world snapping back into an appetite for goods. It’s the profile of a manufacturing giant with excess capacity choosing to redirect, clear, and compete its way through a softening global market and a detente with a major trading partner – all of which serves to demonstrate China’s resilience rather than any inbuilt protection for globalised manufacturing as a whole.
The data does not suggest that China found net new demand, it’s that it found new destinations for the output the US is no longer buying, and potentially priced that output to move.
On the consumer side, the pattern hasn’t been especially clear either, as we noted in our lead up to Black Friday analysis. Spending is still there, but it has leaned more on caution and value than on confidence, which makes the early-season read feel much thinner than usual. Pricing tactics have done a lot of heavy lifting across retail, and that can make it more difficult for planners to judge the real strength of demand. None of this changes the fundamentals of the industry, it just means the supporting information that usually builds a picture of the year is arriving in fragments rather than in a neat sequence.
Technology earns its place in an environment like this because it trims back avoidable risk and offers ways to spotlight dependencies. It can give brands a clearer understanding of where they’re exposed. It can tighten assortment decisions by revealing which SKUs contribute volume. It can reduce late-cycle changes by improving digital sampling. It can link demand forecasts to supply-chain constraints early enough for planners to act, rather than react.
Above all, it can bring visibility to the moments in the process where overproduction or over-indexing on particular markets and inputs becomes most likely, which is important in a year already marked by higher-than-planned stock levels in several parts of the market.
Manufacturing will recover eventually, it always does, but the shape that recovery takes, and the timeline it moves along, is unknowable. What is knowable is the risk that lies in assuming that today’s export rebounds or isolated surges signal something they do not. The world is adjusting to a softer, more uneven distribution of demand, and China’s November surprise is a reminder that headline numbers can obscure as much as they reveal. The underlying pattern remains unchanged: demand is soft, stock is high, flexibility is tightening, and planning has never mattered more.
