Growth softens in ASEAN manufacturing after ending Q3 2022 strongly

A majority of the ASEAN member nations recorded an improvement across their manufacturing sector during October, with the exception of Myanmar and Malaysia.

Singapore remained the strongest performer for the eleventh successive month. However, adjusted for seasonality, the headline PMI fell to 56 in October. While the indicated expansion was sharp overall, it was also the weakest since March.

The Philippines moved up the ranking table, registering the second fastest growth of all seven nations. Despite the rate of expansion (52.6) easing marginally from September’s three-month high, goods producers reported a modest improvement in the health of the manufacturing sector.

The latest upturn across Indonesian manufacturers also lost momentum during the latest survey period (51.8). Similarly, Thai manufacturers registered a slower upturn than in September.

Growth was sluggish across Vietnam’s manufacturing sector (50.6). The latest rise ticked down from September to the slowest in the present 13-month series of expansion, S&P Global said in a release.

Malaysia and Myanmar reported contractions for the second and sixth consecutive months respectively. Malaysian manufacturers saw a quicker downturn during October (48.7). Adjusted for seasonality, the headline PMI for Myanmar increased from September’s recent low, but continued to signal a strong deterioration across the sector (45.7).

Production levels rose sharply—albeit to a lesser extent—across ASEAN manufacturing firms during October amid evidence of improved demand conditions.

The slower rise in acquisitions of raw materials and semi-finished goods impacted inventory levels. Stocks of pre-production inventories contracted for the first time in four months, having a negative impact on the headline PMI.

A renewed fall in the level of unfinished work was registered across the ASEAN manufacturing sector in October, indicating spare capacity. Backlogs have now fallen in three of the past four survey periods.

Shipping delays, port congestion and material shortages continued to add pressure on supply chains.

ALCHEMPro News Desk (DS)