ASEAN manufacturing tumbles anew in December
Myanmar contracted the most in its manufacturing sector, registering a one-year low PMI reading.
Southeast Asia’s manufacturing sector closed 2023 on a weak note as factory activity slumped back to negative territory in December, a closely watched industry survey showed.
The headline S&P Global ASEAN manufacturing purchasing managers’ index (PMI) slipped to 49.7 last month from 50 in November, signalling renewed deterioration in the overall health of the sector. While the dip was marginal, last month marked the third PMI contraction in the past four months.
Four of the seven nations recorded worsening manufacturing conditions in December with Myanmar shrinking the most at a one-year low reading of 42.9, followed by Thailand (45.1), Malaysia (47.9) and Vietnam (48.9).
Of the countries with improving factory activity, Indonesia and Singapore rose the fastest with 52.2 and 52 PMI readings last month, respectively, while Philippines expanded at a modest rate of 51.5.
S&P traced the region’s manufacturing downturn to further deterioration of global demand, with new businesses dropping at its steepest rate since August 2021 in large part due to sustained weakness across overseas markets.
Despite weaker operations, ASEAN manufacturers continued to increase their buying activity and boosted their staffing numbers for the first time in four months.
“While the recent downturn across ASEAN’s manufacturing sector is only mild overall, growing signs of demand weakness could result in fresh cuts to production as we move into 2024,” said Maryam Baluch, Economist at S&P. “Manufacturers across the region will be hoping for expansions in new orders to help support growth over the coming year.”