ASEAN manufacturing sees boost in Q3 2023 with rising orders

Four of the seven ASEAN economies surveyed reported stronger manufacturing conditions. Indonesia led for the second month in a row, registering the quickest expansion rate in 21 months. Myanmar, Singapore, and Vietnam also posted gains, though the latter's improvement was only slight, S&P Global said in a press release.

Conversely, the Philippines and Thailand dipped into contraction for the first time in years. Malaysia also continued its 12-month decline in manufacturing health, although the rate remained stable compared to July.

Price pressures escalated in August. Input price inflation quickened for the first time in seven months, and selling prices also rose, albeit at a modest rate. Despite these upticks, both input costs and output charges remained below long-term trends.

Employment levels stabilised, ending a five-month period of job losses. Backlogs reduced for the second consecutive month, and supply chains continued to improve. Business sentiment amongst ASEAN manufacturers reached a four-month high, although it still lags behind historical averages.

Overall, the sector has been improving for nearly two years, with a slight acceleration in August. Factors such as increased output and stable employment suggest cautious optimism for ASEAN manufacturing in the months ahead.

“The ASEAN manufacturing sector signalled a further improvement in business conditions during August as new orders and output continued to rise, the latter growing at a sharper rate than in July. Moreover, August marked the end of the shallow downturn in employment that began in March, with the latest reading showing broadly stable workforce numbers. However, with manufacturers largely able to keep on top of workloads, backlogs continued to be depleted, which could potentially hold back employment growth in the coming months. Additionally, headwinds from the global economy and the ongoing interest rate cycles across many of the ASEAN economies raise worries of whether current demand trends will be sustainable in the second half of the year,” said Maryam Baluch, economist at S&P Global Market Intelligence.

Fibre2Fashion News Desk (NB)