ASEAN manufacturing sector sustained recovery in May — IHS Markit

ASEAN manufacturing sector sustained recovery in May — IHS Markit
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KUALA LUMPUR (June 2): The ASEAN manufacturing sector sustained its recovery in May as output and new orders increased for the third consecutive month.

According to the latest data of the IHS Markit Purchasing Managers' Index (PMI) released today, the headline PMI was registered at 51.8 in May, slightly lower than 51.9 in April, signalling a third consecutive month of recovery in ASEAN manufacturing conditions.

It said the growth was led by Indonesia in May as the headline PMI reached a record high of 55.3, signalling a strong improvement. 

Meanwhile, Vietnam's headline PMI dipped to 53.1, but still demonstrated solid growth overall.

Singapore recovered in May with a headline PMI of 51.7 after a slight decline in April. Malaysia was the only other constituent nation to register growth in May, with a headline PMI of 51.3, staying above 50.0 for the second month running.

Meanwhile, manufacturing conditions were stable in the Philippines, with the headline PMI at 49.9 following a contraction in April. 

Thailand registered a three-month-low headline PMI of 47.8, whereas Myanmar posted a PMI of 39.7 after a second month of contraction, with conditions remaining severe overall.

IHS Markit noted that more severe supply chain disruptions caused inventories to decline quicker since April, also causing the most widespread delays this year.

"May data highlighted further evidence of capacity pressures on ASEAN firms in May, with backlogs of work rising for the third month in a row. That said, the rate of backlog accumulation remained marginal. At the same time, firms trimmed their staffing levels, thereby extending the current sequence of job shedding to two years. However, the rate of decline remained mild." said the report.

"The ASEAN manufacturing sector continued to recover during May, with sustained upturns in both output and new work. The rates of growth cooled slightly on the month, but were still strong overall,"  IHS Markit economist Lewis Cooper said of the latest survey results.

Going forward, firms remain positive about prospects for the coming year, but their optimism has moderated to a nine-month low and is historically more muted.

Lam Jian Wyn