ASEAN manufacturing rebounds in July, PMI hits 50.1: S&P Global

The ASEAN manufacturing sector showed signs of revival in July, ending a three-month downturn, according to the latest S&P Global ASEAN Manufacturing PMI data. The headline index rose to 50.1 from 48.6 in June, just above the neutral threshold of 50 that separates expansion from contraction.

Production levels increased at a solid pace, surpassing the historical average, while the decline in new orders eased considerably—marking the softest drop in the ongoing four-month sequence of contraction. Firms also reported stability in purchasing activity for the first time in three months, suggesting a shift towards cautious optimism in response to improving demand dynamics, S&P Global said in a release.

“The onset of the second half of 2025 revealed a modest yet encouraging shift within the ASEAN manufacturing sector. For the first time in three months, operating conditions showed signs of improvement, with output returning to growth. The declines in new orders and employment softened, and purchasing activity remained stable throughout the month,” Maryam Baluch, Economist at S&P Global Market Intelligence said commenting on the ASEAN Manufacturing PMI data.

However, despite these positive operational indicators, manufacturers remain wary about the future. Business confidence for the year ahead dropped to its lowest level in five years, with sentiment falling further below the long-run average. Most producers now anticipate only modest production increases over the next 12 months, reflecting broader concerns about global economic uncertainty.

Adding to the caution, inflationary pressures resurfaced. Input costs and output charges rose at their fastest pace in four and five months respectively, though both remained below long-term survey averages.

"However, despite these emerging positive trends, the latest data also indicated a further erosion of confidence regarding the year-ahead outlook among ASEAN manufacturers. Optimism reached its lowest point in five years, well below the long-run average. While an increase in output is anticipated, the growth rate is expected to remain subdued,” Baluch added.

ALCHEMPro News Desk (HU)