Asia Manufacturing Resilience Amid Rising Prices from Ongoing Conflict

Asia's manufacturing sector demonstrated resilience in March 2026, with several key economies reporting expansion despite rising prices driven by the ongoing US-Israeli war on Iran. S&P Global data released on April 1 showed that South Korea, Malaysia, and Thailand all experienced growth in manufacturing activity, while Vietnam, Indonesia, and Taiwan saw more moderate expansion amid energy supply disruptions. The conflict has exacerbated energy price pressures, with oil markets reacting to supply concerns. Thailand emerged as the regional leader with a manufacturing purchasing managers' index (PMI) of 54.1, indicating strong growth. Malaysia rebounded from a contraction in February, returning to expansion territory. However, Vietnam, Indonesia, and Taiwan reported PMI readings that remained above the 50 threshold but showed signs of easing compared to February levels, suggesting underlying vulnerabilities. The semiconductor hub of Taiwan, a critical node in global supply chains, saw its PMI readings decline from the previous month, raising concerns about potential ripple effects in technology and electronics sectors. Energy-intensive industries across the region are particularly vulnerable to price shocks, with oil prices remaining elevated due to the conflict's impact on Middle Eastern supply routes. While the overall picture remains positive for Asian manufacturing, the data highlights growing fragility in the face of geopolitical tensions. Companies in energy-dependent sectors and those reliant on stable supply chains may face increased costs and operational challenges in the coming months. Investors are closely monitoring how these dynamics play out in key markets like Thailand and Malaysia, where growth momentum appears strongest.