ASEAN manufacturing sees strongest growth in over three years in Oct

The manufacturing sector in the region went from strength to strength, with the health of the industry improving at one of the strongest rates in over three years in October. While new export orders recorded negligible growth, the overall influx of new work rose sharply and at a pace not seen since September 2022, alluding to especially strong gains in the domestic market. Firms ramped up their production, with the pace of increase hitting a 17-month high, S&P Global said in a press release.

Employment was raised further, with the pace of job creation accelerating on the month. Additionally, price pressures eased, with charges rising minimally at the start of the final quarter.

The uptick in the headline index was driven by strong expansions in new orders and output, with modest increases in employment and purchasing activity also contributing positively. Except purchasing activity, where the rate of growth remained strong and unchanged on the month, all aforementioned trackers saw their respective paces of growth quicken in October.

The data also indicated scope for firms to further raise their staffing numbers as pressures on capacity intensified, which was underscored by a solid expansion the volume of backlogs. The rate of accumulation was the most marked since January 2022.

Additionally, inflationary pressures eased. Both costs and selling prices rose at softer rates, the latter increasing at the slowest pace in four months and only minimally.  Lastly, companies maintained an optimistic view towards output growth prospects, although the degree of confidence weakened slightly on the month, added the release.

“October data revealed a strong improvement for the ASEAN goods producing sector. Production volumes and new orders registered more marked expansions. Uptick in purchasing activity remained solid, and staffing numbers were ramped up at a stronger pace, with backlogs data hinting at further scope for job creation,” said Maryam Baluch, economist at S&P Global Market Intelligence.

“Manufacturers remain positive of their year-ahead outlook for output. If new orders continue to rise sharply as they have done so in the latest survey period, and prices pressures subdued, we can expect the ASEAN manufacturing sector to sustain its current level of growth as we conclude the year,” added Baluch.

ALCHEMPro News Desk (SG)