Latest news with #ASEANManufacturingPurchasingManagers'Index
Fibre2Fashion
3 days ago
- Business
- Fibre2Fashion
ASEAN manufacturing PMI slips to 48.6, sharpest decline since 2021
The S&P Global ASEAN Manufacturing Purchasing Managers' Index (PMI) posted 48.6—down from 49.2 in May—the index remained below the neutral 50 mark for the third consecutive month, signalling a modest but accelerating contraction. The ASEAN manufacturing sector slipped into contraction at the start of the second quarter, with the following months signalling further deteriorations in operating conditions. In fact, June marked the most worsening in the health of the sector since August 2021. A sharper decrease in new orders was accompanied by more substantial cuts to staffing levels and purchasing activity. Although production was also reduced, this was only marginal. Furthermore, despite a strongly optimistic outlook for output in the year ahead, confidence slightly waned since May and was historically subdued. This suggests a continuation of the lacklustre performance of the ASEAN manufacturing sector, S&P Global said in a press release. ASEAN's manufacturing sector saw its sharpest downturn since August 2021, with the S&P PMI falling to 48.6 in June. New orders, exports, employment, and purchasing activity declined, reflecting weakening demand. Despite subdued inflation and mild production cuts, business confidence remained historically low. S&P Global warns of ongoing downside risks due to global tensions and tariff uncertainties. Both new orders and output remained in contraction territory since April. Recent figures revealed a sharper decline in incoming new orders for ASEAN goods producers, marking the most significant drop since August 2021. The overall new orders landscape was once again hampered by declining foreign demand for ASEAN goods, which continued to worsen. In fact, the rate of decrease in new export orders was solid and the most pronounced in eight months. Meanwhile, the downturn in production remained shallow, with the rate of decrease consistent with that observed in May. Manufacturing companies across ASEAN aligned their purchasing of inputs and employment in line with the deteriorating demand picture. Both measures recorded steeper contractions, with payroll numbers being reduced to the greatest extent since October 2021. The latest ASEAN manufacturing performance was coupled with historically muted inflationary pressures. The rate of input price inflation softened further since May, to indicate only a modest increase in cost burdens, which was the slowest in just over five years. Although the pace of charge inflation accelerated during the month, manufacturers raised their prices only marginally, added the release. While goods producers were optimistic about an increase in output over the coming year, the overall degree of optimism diminished and was historically subdued. Sentiment is currently the second-least optimistic since July 2020, suggesting a muted manufacturing performance in the year ahead. 'The ASEAN manufacturing sector concluded the first half of the year on a worrying note, with the headline index dropping to a 46-month low. Production continued to contract, and new orders, purchasing activity, and employment all experienced sharper declines. Although subdued inflationary pressures may partially assist the sector in reviving sales, the current downside risks stemming from ongoing international tensions and tariff-related announcements inject uncertainty into the outlook for the year ahead,' said Maryam Baluch, economist at S&P Global Market Intelligence. Fibre2Fashion News Desk (SG)
The Star
04-06-2025
- Business
- The Star
Asean manufacturing sector records slight uptick in May amid challenging conditions - S&P Global
Workers assemble VinFast Auto Ltd. Feliz S electric scooters at the company's manufacturing plant in Hai Phong, Vietnam. - Bloomberg KUALA LUMPUR: The ASEAN manufacturing sector recorded a slight performance uptick in May, with the leading index inching up to 49.2 from 48.7 in April, according to the latest S&P Global ASEAN Manufacturing Purchasing Managers' Index (PMI). In a note, S&P Global said the modest uptick was supported by a softer and marginal rate of output contraction. "As a result, firms aligned their employment levels, purchasing activity, and stocks of input accordingly, with downturns in all areas showing less severity compared to April. "That said, new orders received at the ASEAN manufacturing sector fell at a quicker rate,' it said. S&P Global stated that key indicators, including output, new orders, employment, and raw material inventories, have all registered declines. "Vendor performance also deteriorated, (with) delivery times for inputs lengthening after remaining relatively stable the previous month,' it said. On a slightly more positive note, S&P Global noted that cost pressures have eased, with companies raising charges only marginally. "This adjustment, however, partly reflects a broader trend of declining demand within the market,' it said. S&P Global said new orders from international markets also weakened, signalling an overall challenging demand environment. "Though modest, the rates of contraction were the most marked since August 2021 and over the past five months, respectively,' it said. Regarding the output prospects, S&P Global stated that ASEAN manufacturers exhibited a slightly more optimistic outlook for the year ahead, despite the sector's subdued performance. However, it said the level of confidence remains historically weak, ranking as the second-lowest since July 2020. Commenting on the data, S&P Global Market Intelligence economist Maryam Baluch said the region's manufacturing sector continued to face challenges as it reached the midpoint of the second quarter, with operating conditions further worsening. She said the PMI data indicated that while the latest downturn has been milder -- partly due to softer contractions in output, employment, and purchasing activity -- the decline in new orders has intensified, marking the steepest drop since August 2021. "This notable decrease, along with a general sense of subdued optimism among industry panellists, suggests that the sector may face ongoing difficulties in achieving growth in the coming year,' she added. - Bernama
