Manufacturing activity across Europe and Asia saw a notable uptick last month, fueled by a surge in demand for AI-related technology and defense equipment. Despite the ongoing threat of inflation exacerbated by energy price volatility and rising interest rates, industrial sectors have shown surprising resilience. S&P Global’s Eurozone PMI climbed to a multi-year high, indicating that the demand for specialized capital goods is effectively offsetting the cooling interest in consumer products as businesses navigate higher borrowing costs.

The trend is particularly evident in Asia, where tech powerhouses like South Korea and Taiwan have reported significant growth driven by the semiconductor boom. South Korea experienced its fastest export growth in over a decade, while Taiwan’s manufacturing sector continues to thrive at the heart of the AI supply chain. Although Japan’s recovery has been more measured and conditions remain inconsistent across smaller Asian economies, the overall industrial landscape appears to be gaining momentum. Analysts remain cautious about rising input costs, but for now, the relentless demand for high-tech infrastructure is providing a vital buffer against global economic headwinds.