ASEAN Manufacturing Sector Improves Slightly at Start of 2024

The headline S&P Global ASEAN Manufacturing Purchasing Managers’ Index (PMI) rose from 49.7 in December to 50.3 in January.

IDXChannel - The headline S&P Global ASEAN Manufacturing Purchasing Managers’ Index (PMI) rose from 49.7 in December to 50.3 in January, printing above the neutral 50.0 threshold for the first time in five months.

The latest reading signalled only a slight improvement in the health of the ASEAN manufacturing sector.

“The start of the year brought a renewed improvement in ASEAN manufacturing sector conditions, albeit one that was only slight. However, the upturn was largely driven by stronger growth in output, as customer demand remained subdued and new orders fell again in January," Maryam Baluch, Economist at S&P Global Market Intelligence said in a media release on Thursday (1/2/2024).

"The muted performance of the sector meant that staffing levels were left unchanged. Meanwhile, price pressures intensified, with rates of both input cost and selling price inflation the highest recorded in ten months," Baluch added.

At the national level, growth was recorded across four of the seven ASEAN constituents, with Indonesia leading the upturn by a notable margin. Meanwhile, the most marked deterioration in conditions was seen in Myanmar.

Looking ahead, ASEAN manufacturers continued to express strong optimism when assessing the 12- month outlook for output. The overall level of positive sentiment remained below the historical average, however, despite rising from December.

“Going forward, manufacturers will be unable to sustain growth in output amid demand shortfalls. As a result, we could see the PMI revert below the 50.0 mark if new orders continue to fall. Furthermore, numerous global headwinds and generally sluggish demand from overseas markets could continue to weigh on the sector in future," the economist stated. (WHY)