ASEAN manufacturing growth improves marginally in Jan: S&P Global

Growth momentum cooled in the region for both output and new orders, leading to a modest and restrained increase in purchasing activity.

On a positive note, after two months of job losses, the employment landscape stabilised.

Additionally, price pressures continued to cool, with operating costs and charges rising at the weakest rates in 18 and four months respectively.

The improvement in operating conditions was highlighted by only slight increases in order book volumes and output. Growth rates in both categories have slowed, with the most recent gains being the weakest observed in their respective current 11- and four-month growth trends.

Due to the slight slowdown in manufacturing demands, input purchasing activity among ASEAN goods producers increased at a more subdued pace in January. The latest expansion was the weakest in three months.

However, backlogs continued to rise, thus indicating increasing pressures on capacity.

The eleventh consecutive monthly uptick in outstanding work, though mild, was the strongest since September last year.

ASEAN manufacturers also recorded a subtle shift in their hiring practices after minimal reductions were recorded in November and December of last year, a release from S&P Global Ratings said.

Attitudes toward destocking remained steady as firms modestly reduced stocks of purchases and finished goods to meet production needs amid ongoing supply challenges.

Vendor performance declined for the ninth consecutive month in January, though the latest drop was the least severe in six months.

January data revealed a continued easing of inflationary pressures. Input price inflation slowed for the second consecutive month, marking the weakest increase in operating costs since July 2023.

Output charge inflation also moderated, rising modestly and at the weakest pace seen in four months.

Business confidence across ASEAN manufacturers remained broadly unchanged in January from that seen in December. While firms anticipate output to rise in the coming 12 months, optimism remained historically subdued.

ALCHEMPro News Desk (DS)