Having improved in each month since October 2021, September data revealed a deterioration in the health of the Association of Southeast Asian Nations' (ASEAN) manufacturing sector. The region’s manufacturing purchasing managers’ index (PMI) slipped into contraction territory for the first time in 25 months in September, with the index printing 49.6, down from 51.0 in August.

Companies reported a fresh fall in new orders, while production expanded at the weakest pace in two years. Goods producers also lowered their workforce numbers, following a fractional rise in August, S&P Global said in a press release.

September data showed rising inflationary pressures, with the fastest increases in input prices and output charges in several months. Malaysia had the most significant decline in manufacturing for the third straight month, with its headline index at 46.8, the lowest in 2023. Singapore and Thailand also saw sharp contractions. In contrast, Vietnam showed marginal deterioration with a PMI of 49.7.

Myanmar, the Philippines, and Indonesia were the only countries with improved operating conditions, albeit at a slower pace. Overall, the ASEAN manufacturing sector weakened in Q3 2023, driven by a modest drop in factory orders and new export business. This led to reduced production and purchasing activities.

Employment slightly decreased as backlogs were cleared quickly. Costs rose sharply, though inflation rates were lower than last year. Supplier delivery times improved, and firms remained optimistic about future output, though confidence was still below the long-term average.

Fibre2Fashion News Desk (NB)

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