ASEAN manufacturing slows to 11-month low in June as orders soften

PMI fell to 50.5 as factories reported slower output growth and weaker new orders.

ASEAN manufacturing growth slowed to an 11-month low in June despite the sector remaining in expansion for a 12th consecutive month, as weaker new orders, productions and export demand weighed on activity, according to S&P Global.

The S&P Global ASEAN Manufacturing Purchasing Managers' Index fell to 50.5 in June from 51.5 in May, marking the weakest improvement in manufacturing conditions since July 2025, when the current period of expansion began.

“The slowdown in the ASEAN manufacturing sector at the end of the first half of the year reflected weaker expansions in new orders and output,” it said.

Production increased only marginally, matching April as the joint-softest expansion during the current 12-month growth run, whilst new export orders also fell sharply and at a faster pace than in May.

Purchasing activity continued to expand for an eleventh consecutive month, whilst employment declined for a third straight month.

Firms also reduced stocks of inputs and finished goods during the month.

Suppliers' delivery times continued to improve, with delivery delays easing to the weakest extent in 10 months.

Input cost inflation and output charge inflation both eased in June, although it slowed by a greater degree, S&P Global said.

Business confidence weakened, with manufacturers' expectations for output over the next 12 months falling to a three-month low.

Firms nevertheless remained optimistic that production would increase, it noted.

"The growth seen across ASEAN's manufacturing sector at the start of the year slowed in the second quarter, with June marking the smallest improvement in sector health for a year," said Maryam Baluch, Economist at S&P Global Market Intelligence.

"The slowdown reflects weaker growth in new orders and output," she said, adding that easing cost pressures suggested firms were taking the opportunity to build margins.