ASEAN manufacturing activity picks up in May as orders rebound
Though export sales fell at fastest rate since 2024.
Manufacturing activity across South-East Asia gathered pace in May, snapping a three-month run of slowing growth as new orders strengthened and output rebounded from a sluggish April, according to the latest S&P Global survey.
The S&P Global ASEAN Manufacturing Purchasing Managers’ Index rose to 51.5 in May from 50.7 in April — the first improvement in the headline reading since February and the eleventh consecutive month above the 50.0 mark that divides expansion from contraction. The upturn signals a moderate but broadening recovery in regional manufacturing health.
New orders were the principal driver of the improvement, rising at their fastest pace in three months and at a rate described as historically strong. Production also accelerated after barely registering any growth in April, with purchasing activity increasing at a broadly comparable rate.
The one significant blemish was export sales, which fell for the third month in a row. The latest decline was the sharpest since September 2024, underlining how global trade disruptions continue to weigh on the region’s manufacturers even as domestic demand holds up.
Delivery times from suppliers lengthened again in May, though to the least extent in nine months. Faced with ongoing delays, firms dipped into their inventories to meet production needs, with stocks of both raw materials and finished goods edging lower on the month.
Price pressures remained elevated but eased slightly from April’s levels. Both input costs and factory-gate charges continued to rise at rates described as substantial and historically marked — a persistent drag on margins and competitiveness across the region.
On the employment front, firms remained cautious, with staffing levels registering a slight decline in May. However, business confidence about the year ahead improved to a four-month high, moving back towards its long-run average — a signal that manufacturers broadly expect output growth to continue.
Maryam Baluch, Economist at S&P Global Market Intelligence, said the results marked a shift away from the consecutive monthly slowdowns that had set in since the Middle East conflict escalated in February. She noted that new order growth had reached a three-month high and that output had recovered at a moderate pace after a sluggish previous month. Purchasing activity also rose, though firms stopped short of expanding their workforces. She cautioned that ongoing trade disruptions and inflationary pressures stemming from the conflict would continue to act as headwinds to growth in the months ahead.
