Thursday 28 Mar 2024
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KUALA LUMPUR (March 1): The ASEAN manufacturing sector deteriorated for the first time in four months during February, following two months of growth, with renewed falls in both factory production and new work weighing on the performance of the sector.

According to IHS Markit Purchasing Managers’ Index (PMI) latest data, the ASEAN Purchasing Manager Index (PMI) was registered at 49.7 in February, which declined from January's 32-month high of 51.4, and signalled the first deterioration in the health of the sector since last October.

It said the rate of reduction in total order book volumes was slightly quicker than that for output, which fell only fractionally, in part due to a sharp drop in new export orders.

IHS Market also highlighted that according to its February data, sustained pressure on supply chains, with vendor performance deteriorating for the thirteenth straight month and solidly, for which lead times lengthened was the smallest since November last year.

It said amid weak client demand and lower production requirements, backlogs at ASEAN goods producers decreased again in February but was still modest overall.

At the national level, Myanmar registered a headline figure of 27.7, the steepest deterioration in conditions due to political uncertainty which led factories to close.

Meanwhile, in both Thailand and Malaysia, the downturns were sustained, with the headline PMI registered at 47.2 and 47.7 respectively.

Meanwhile, Indonesia registered a headline index of 50.9, which softened from January's six-and-a-half year high, and Vietnam registered the quickest improvement in conditions for two months with 51.6.

In the Philippines, the headline index remained unchanged at 52.5, whereas Singapore registered the strongest improvement in manufacturing conditions across the seven constituent nations during February at 55.2.

IHS Markit economist Lewis Cooper said: "Manufacturing conditions across the ASEAN region deteriorated for the first time in four months during February."

He said the rate of decline was only slight, however, reflective of only mild reductions in both output and new orders.

"In line with the more challenging conditions, sentiment dipped to a five-month low and was subdued in the context of the series history. That said, goods producers remained, on average, optimistic with regard to output over the coming year.

"At the national level, further contractions in Malaysia and Thailand weighed on the performance of the sector as a whole, as did Myanmar's record downturn, while growth slowed or remained mild across the rest of the ASEAN nations.

“On the whole, the data only suggest a slight bump in the road to recovery during February. Nonetheless, client demand will need to pick up in the coming months to ensure the goods producing sector can get back on track,” he said.

Edited BySurin Murugiah
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