ASEAN manufacturing holds firm in August as new orders near record
The region's manufacturing PMI eased to 52.3.
Manufacturing activity across Southeast Asia remained on a solid footing in August, with new orders surging at close to a record pace even as the region's headline growth indicator ticked down slightly from July.
The S&P Global ASEAN Manufacturing Purchasing Managers' Index eased to 52.3 in August from 52.8 the previous month, still signalling a solid, if slightly softer, improvement in the health of the bloc's manufacturing sector. Analysts expect the third quarter as a whole to outperform the previous period, which had been heavily dented by the war in the Middle East.
The modest dip in the headline reading was driven chiefly by a softer, though still robust, rise in production. Employment and stocks of purchases both declined for a fourth consecutive month, though the falls were only marginal, whilst backlogs of work continued to build at the same pace as in July, pointing to persistent capacity pressures. Purchasing activity also rose solidly, albeit at a slightly slower clip than the month before.
The standout feature of the survey was a rapid, near-record increase in new orders, with growth remaining sharp and only narrowly below the all-time high recorded in February. Price trends also offered encouragement: both input costs and selling prices rose at their weakest rates in six months, while supply-chain performance improved, with vendor delivery times lengthening only slightly — a milder deterioration than in July.
Business confidence strengthened further, with the survey's gauge of expected future output rising for a second straight month to reach its highest level in almost four years.
Maryam Baluch, Economist at S&P Global Market Intelligence, said the region's manufacturers had continued to post solid gains in August on the back of resilient demand, particularly from domestic markets, with strengthening confidence and easing price pressures pointing to further momentum as the second half of the year progresses.
She added that the slowdown in output growth, whilst real, remained modest, and that the renewed but fractional declines in employment and purchased stocks could prove short-lived given mounting capacity pressures, continued purchasing activity and early signs of recovery across supply chains.
