ASEAN manufacturing expands for 10th consecutive month
International Business News – According to reports: ASEAN’s manufacturing industry expanded for the 10th consecutive month in July, with Singapore’s manufacturing industry expanding the most.
S&P Global released the ASEAN Manufacturing Purchasing Managers Index (PMI) for July on August 1, and the index edged up to 52.2 from 52 in June.
A PMI index above 50 points indicates that the manufacturing sector is expanding, while a reading below 50 points indicates that the manufacturing sector is shrinking.
Among the seven ASEAN countries, Singapore’s manufacturing PMI is 60, leading other countries. It was the second month in a row that Singapore hit a new high since December 2021 and was the highest ever reading of the ASEAN manufacturing PMI. Myanmar was the only one of the seven ASEAN nations to see a manufacturing contraction in July.
Thailand’s manufacturing PMI was 52.4, slightly lower than the high point in February, but its ranking rose in July, indicating that the improvement of manufacturing business accelerated; Indonesia was 51.3, and the overall improvement in manufacturing was not significant; Vietnam (51.2) and the Philippines ( 50.8) growth slowed, the slowest growth in the past 10 months and 6 months; Malaysia (50.6) hit a new high in the past three months.
The report pointed out that another expansion of the labor force also further improved the PMI index. Separately, output and new orders rose at a solid pace, although they slowed in July, and employment and purchasing activity rose during the most recent survey period, reversing contractions from previous months.
Inflation weighs on ASEAN manufacturing, but signs show it is cooling off
Backlogs of work in ASEAN countries have risen every month since July 2021, but seasonally adjusted figures have fallen below 50, evidence of idle capacity in the sector.
On the price front, inflationary pressures across ASEAN manufacturing remain moderate, but there are signs that inflation is cooling. Supplier performance in terms of lead times continues to deteriorate, with supplier lead times extending to as long as two and a half years in July.
S&P Global Economist said, “The latest PMI data showed further growth in the ASEAN manufacturing sector, with the latest figure improving from a three-month low in June, with increased demand and the easing of anti-infection measures boosting production and sales. In addition, business demand drove a modest rise in labor levels.”
The economist also warned that current high price pressures and the possibility of stricter monetary policy by the region’s central banks may affect growth momentum in the coming months.