The Association of Southeast Asian Nations’ (ASEAN) manufacturing purchasing managers’ index (PMI) was unchanged from September at 49.6 in October 2023. The latest reading was indicative of a marginal deterioration in operating conditions for the second month running.

Of the seven ASEAN nations covered five recorded a deterioration in the health of their manufacturing sector; the highest number of countries to report a decline since August 2021. The downturn was led by Malaysian manufacturers for the fourth month running. Operating conditions there weakened at an unchanged and solid pace—headline PMI at 46.8, thereby indicating the joint-quickest contraction since January, S&P Global said in a press release.

Thailand’s manufacturing sector also recorded a further deterioration in conditions. At 47.5, the headline figure posted below the neutral 50.0 mark for the third month running. Moreover, the rate of decline was the most pronounced in over two-and-a-half years. Modest deteriorations in business conditions were noted across both Singapore at 48.6 and Myanmar at 49.0. However, while the downturn softened across Singapore’s manufacturing sector, Myanmar registered a fresh decline following an eight-month period of improvement.

Vietnam registered a marginal downturn in October, with the rate of deterioration broadly unchanged from that seen in the previous survey period at 49.6. The two countries that saw an improvement in the health of their manufacturing sectors were Indonesia at 51.5 and the Philippines at 52.4. While the former saw growth momentum ease to a five-month low, operating conditions improved at the fastest pace in seven months at Filipino manufacturing firms.

Business conditions across the ASEAN manufacturing sector weakened slightly again during October. The latest downturn stemmed from softer underlying demand, which fed through to a second month of contraction in new orders. Despite this, production levels at ASEAN goods producers increased again, in part due to the build-up of orders throughout most of 2023, which supported a further marked drop in backlogs. However, the rate of output expansion was marginal overall and the weakest in the current 25-month sequence of growth.

The sustained drop in new orders also contributed to a fresh fall in input buying, that marked the first decline since September 2021. With goods producers cutting back their purchasing activity, usage of both pre- and post-production holdings increased. Inventories were depleted at rates quicker than that seen in the previous survey period.

Vendor performance improved for the eighth month running. Average lead times shortened only marginally, but nevertheless this signalled reduced pressure on supply chains amid the recent worsening of demand conditions. Softer market conditions also helped to cool inflationary pressures. Both input prices and output charges increased at historically muted rates.

Manufacturers retained a positive outlook for output, with firms generally anticipating an expansion of production in the coming 12 months. That said, the degree of confidence weakened to a three-month low and remained below the series average.

Lastly, despite the further weakening of conditions across the ASEAN manufacturing sector, employment was broadly stable in October, with the respective seasonally adjusted index ticking up slightly from September.

Fibre2Fashion News Desk (NB)

Disclaimer - All News/Articles items are subject to copyright and no article either in full or part may be reproduced in any form without permission from Fibre2Fashion Pvt. Ltd.