ASEAN factory growth cools to six-month low in March

PMI falls to 51.8 as price pressures surge.

ASEAN manufacturing growth slowed to a six-month low in March as output and new orders rose more softly and inflationary pressures spiked, according to S&P Global.

The ASEAN Manufacturing Purchasing Managers’ Index fell to 51.8 in March from a record 53.8 in February, although the reading remained above the 50 mark that separates growth from contraction and extended the sector’s expansion streak to nine months.

S&P Global said new orders increased at the weakest pace since August, whilst production growth was the slowest in eight months, as a fresh decline in export orders weighed on overall demand.

Businesses also raised purchasing and hiring only marginally in March, whilst stocks of finished goods fell for the first time since November.

Input price inflation surged to its highest level since October 2022, and output price inflation climbed to its strongest level in three years.

S&P Global said early effects of the war in the Middle East were visible across ASEAN economies, affecting demand, production, confidence, and prices, although manufacturers still expected output to grow over the next 12 months.