Biz conditions in ASEAN manufacturing a bit better in Feb: S&P Global

A sustained rise in production was backed by a fresh increase in employment and a further drop in backlogs of work. However, new orders contracted for the sixth consecutive month.

The headline S&P Global ASEAN manufacturing PMI rose to 50.4 in February from 50.3 in January, thereby indicating a second successive monthly improvement in operating conditions. However, the pace of improvement remained only marginal.

Working through backlogs of orders and higher staff numbers supported an increase in ASEAN manufacturing output for the 29^th successive month. Whilst easing from January and modest, the rate of growth was quicker than the survey average.

After stagnating in January, employment rose for the second time in three months in February. Though only slight, the pace of job creation was the fastest since September 2022.

Meanwhile, the seasonally adjusted new orders index remained below the neutral 50 mark in February, to signal a slight fall in client demand.

The reduction in factory orders was partly due to a rapid decline in new work across Thailand’s manufacturing sector, which also recorded the strongest deterioration in operating conditions of all seven monitored ASEAN constituents, S&P Global Ratings said in a release.

Overseas demand for ASEAN goods also weakened in February, thereby extending the current run of contraction to 21 months. The latest drop in new export orders was the softest since last April.

Inflationary pressures were historically strong, with input costs rising at the sharpest pace for a year. Meanwhile, the rate of charge inflation changed little from January and was solid overall.

Manufacturers in the region were optimistic regarding the 12-month outlook for output. However, overall confidence fell to a four-month low and remained below the long-run survey average.

Fibre2Fashion News Desk (DS)