Manufacturing activity in Asia and the US continues to slump, reflecting widening growth divergences and a global manufacturing recession. The latest data from Asia shows that most countries in the region are facing pressures from cost inflation, shrinking output, and new orders. Southeast Asia, including trade bellwether Taiwan, recorded contraction in October. In China, factory activity shrank in October after a brief expansion in September. In the US, the manufacturing sector contracted at a steeper pace than expected in October, with the index of manufacturing activity falling to 46.7. New orders and inventories declined, while production remained in expansionary territory. Business activity across the four largest developed world economies fell for a third successive month in October, led by Europe, while the US saw modest growth in both manufacturing and services. Japan experienced its first contraction since December 2022. However, the inflation outlook improved, and business confidence rose. Despite these challenges, companies are managing outputs and labor costs. The manufacturing sector in the US contracted for the 12th consecutive month in October, with the Institute for Supply Management's manufacturing purchasing managers index declining to 46.7. Thirteen different industrial sectors reported contraction. The sudden weakness in manufacturing came after activity had appeared to be improving in the third quarter. The volume of diesel and other distillate fuel oils supplied to the domestic market rose marginally, while sales of electricity to industrial customers continued to decline. Tight energy supplies have been a major source of inflation risk. The GEP Global Supply Chain Volatility Index indicates that the global manufacturing recession persists as supply chains worldwide remain significantly underutilized. The index decreased in October, indicating a 7 successive month of rising spare capacity. The report highlights sustained weakness in economic conditions across Europe and Asia, while the US economy continues to display resilience. Demand for raw materials, components, and commodities remains depressed, and there are no signs of improvement. The global supply chain volatility index fell to -0.41 in October 2023, marking the seventh consecutive month of increasing spare capacity worldwide. The report by S&P Global and the GEP indicates a rise in excess capacity across Asian supply chains, signaling a global manufacturing recession. Europe continues to report the largest level of spare capacity, particularly in Germany's manufacturing industry. North America has excess capacity but to a lesser extent than other regions. Demand for raw materials remains depressed, and global purchasing activity fell again in October. Shortages of workers are not impacting global manufacturers' capacity to produce. The supply chain volatility index for North America suggests a soft landing for the US economy, while Europe and the UK indicate considerable economic fragility. Asia experienced the biggest rise in spare supplier capacity since June 2020. The GEP Global Volatility Index indicates a persistent manufacturing slump into 2024, with spare capacity in global supply chains. North America shows resistance to economic headwinds, while Asia's excess supplier capacity gives manufacturers leverage to drive down prices. November saw weakness in demand globally, with North America and Asia showing less aggressive cuts to purchasing compared to Europe. Inventory levels remain cautious, material shortages are low, labor availability is unconstrained, and transportation costs stabilize. Regional supply chain volatility shows the manufacturing downturn passing its peak in the US, significant economic weakness in Europe, and high vendor spare capacity in Asia. [5fffe490]