ASEAN manufacturing reflects growth in 2024, PMI steady at 50.7 in Dec

Expansions in both output and new orders were sustained. Additionally, buying activity ticked up to support higher business requirements. Most positively, inflationary pressures moderated in December, as per a press release by S&P Global.

Underlying components of the PMI index revealed sustained upticks in two of the five largest segments, new orders and output. The former saw growth for a tenth straight month, as the latest uptick signalled a modest rise which was also the strongest this quarter.

However, new export orders remained a drag, with a downturn in December extending the current run of contraction to 31 months. Nonetheless, a sustained and slightly quicker intake of overall new orders fed through to a solid and historically strong rise in output. The rate of growth was broadly consistent with that seen in November.

ASEAN manufacturers engaged in purchasing activity for a second straight month in December. The rate of growth was the fastest since August. That said, pre-production inventories were depleted for a sixth straight month, suggesting that inputs were directly used for production. Moreover, firms also dipped into their holdings of finished items, as stocks of post-production inventories were cut back for a twentieth straight month in December, and that too at a solid pace, added the release.

Staffing levels were cutback, albeit marginally, for a second straight month in December, despite evidence for increasing pressures on capacity, as backlogs rose for a tenth consecutive month.   December marked a renewed easing of price pressures. Rates of both input price and output charge inflation eased from November’s slight spike.

Manufacturing firms across the ASEAN region expressed optimism for the year ahead outlook in December. However, the degree of confidence fell to an eight-month low and remained below its long-run average.

“The ASEAN manufacturing sector saw modest gains as the year ended, with the headline index remaining stable in December. Demand trends improved, supporting growth in production and purchasing activity. More positively, price pressures eased, reversing the prior month's intensification,” said Maryam Baluch, economist at S&P Global Market Intelligence. “Despite higher business requirements, employment, fell for the second consecutive month. Moreover, while the 2025 output outlook remains positive, it waned slightly. Growth in new orders remains mild and heavily dependent on domestic demand, while weak international demand continues to hinder growth.”

ALCHEMPro News Desk (SG)