ASEAN manufacturing expands strongly in Nov despite weak export orders

Growth momentum was driven by sharper increases in new orders and output, with both metrics registering among their fastest expansions on record. Despite robust domestic demand, manufacturers reported a renewed decline in international orders, highlighting an uneven global trade environment.

To support rising production needs, firms boosted purchasing activity for a fourth consecutive month. Input buying grew at its quickest pace since March 2024, reflecting stronger supply-chain confidence. However, hiring remained subdued. Employment rose for the third month in a row, but only fractionally, leaving firms struggling to keep pace with swelling workloads, S&P Global said in a press release.

As a result, backlogs increased at the fastest rate in the survey’s history, marking escalating capacity pressures across the region. Cost conditions also turned less favourable. Input prices rose sharply—at their quickest rate in nearly a year—prompting firms to raise selling prices, though inflationary pressures remained historically moderate.

Looking ahead, manufacturers stayed optimistic about future output, but overall sentiment remained weaker than the long-term trend, suggesting lingering caution despite the sector’s strong near-term performance.

Maryam Baluch, economist at S&P Global Market Intelligence said: “The ASEAN manufacturing industry has indicated a robust final quarter of the year till now, with data for November showcasing strong output and new order growth. Supporting the increased production requirements, firms also indicated a stronger intake of inputs.

“Despite the overall positive performance of the sector, there were some areas of concern. While confidence remains strongly positive, it is still below the historical average, suggesting a relatively cautious outlook for growth in the coming months. This sentiment is also reflected in firms' decisions regarding employment expansion, which has been marginal at best during the current three-month sequence of job creation. Consequently, this has led to manufacturing firms accumulating backlogs at the strongest rate in the series' history. Additionally, price pressures intensified in November, which may present challenges to future growth.”

ALCHEMPro News Desk (KD)