Manufacturing

• The European Union is deploying 19 AI Factory hubs and planning nine new supercomputers to integrate industrial AI into its manufacturing sector. • This strategic push aims to close the competitive gap with the US and China, leveraging Europe's existing manufacturing expertise as a "competitive moat." • A significant funding disparity persists, with the US receiving 75% of global AI venture capital compared to less than 12% flowing into Europe.

• A new report reveals that India's labour productivity gap with China has widened significantly since 2000, despite the country's strong overall GDP growth. • India has failed to achieve the industry-led productivity transformation seen in peer nations like China and South Korea due to structural constraints and pandemic-related disruptions. • This gap matters because it indicates that India's economic growth is not yet driven by a high-efficiency manufacturing leap, limiting its global competitiveness.

• India's manufacturing sector experienced its fastest expansion in three months during May, driven by sustained demand. • Despite the growth, businesses faced some of the most intense cost pressures seen in nearly four years. • Business optimism has declined, reaching its lowest level since February.