Oct sees sustained, marginal improvement in ASEAN manufacturing health

A fresh rise in output was recorded following the first fall in three years in September.

Meanwhile, demand trends improved for an eighth successive month in the region, but at the weakest pace during this growth sequence.

Job creation halted in October following a fractional uptick in the month prior, and purchasing activity contracted for the first time in a year, S&P Global said in a release.

The headline S&P Global ASEAN manufacturing purchasing managers’ index (PMI) held steady at 50.5 in October, unchanged from September, indicating the joint-weakest improvement in manufacturing conditions since February.

Although demand trends showed signs of improvement at the beginning of the final quarter, they experienced a cooling for the third consecutive month, resulting in only a slight uptick—the weakest in the current eight-month growth sequence.

Goods producers across ASEAN adjusted their buying activity and workforce numbers accordingly, with the former recording a drop for the first time in 12 months.

As has been the case since March, ASEAN manufacturers reported an increase in backlogs in October, indicating rising pressure on manufacturing capacity. However, ongoing improvements in demand conditions enabled manufacturers to increase their output in the month.

The respective seasonally-adjusted index shifted into expansion territory after posting its first sub-50 reading in three years in September. In October, ASEAN manufacturers continued their destocking efforts, depleting both pre- and postproduction inventories for the fourth and eighteenth consecutive month respectively.

Cost pressures simmered down, with input prices rising at the slowest pace in 15 months. Additionally, manufacturers raised their output prices at a modest pace, an S&P Global release said.

Expectations for output remained positive across the ASEAN manufacturing sector. However, growth projections were downgraded as optimism dipped to a four-month low, continuing a trend of weaker expectations compared to the historical average since November 2022.

Fibre2Fashion News Desk (DS)