ASIA: ASEAN Manufacturing Improves Driven By Stronger Orders & Output

February S&P Global manufacturing PMIs across the Asian region improved despite heightened global uncertainty around US trade policy. The ASEAN PMI rose to 51.5 from 50.4, signalling the fastest pace of growth in the sector since July 2024 driven by output and new orders, which supported job creation and improved business sentiment. The rise was predominantly driven by Indonesia but all countries saw an increase in the PMI except the Philippines, even if some are still recording a contraction in activity. Price & cost pressures remained subdued and were little changed.

• Indonesia outperformed the rest of ASEAN with the manufacturing PMI rising to 53.6 from 51.9, the highest since March last year. It has posted improvements for four straight months. A pickup in new orders (highest growth since March 2024) drove increases in output, hiring and purchasing as well as the most optimistic business confidence in almost three years. The improvement in orders was due to domestic demand as export orders fell slightly.
• The weak currency added to cost pressures from raw materials and other input costs. Producer selling price inflation though was subdued and at its slowest in four months.
• Thailand’s manufacturing activity growth returned to positive territory with the PMI rising to 50.6 from 49.6 in January due to a recovery in output. The index has averaged around the breakeven-50 mark over the last 6 months. Orders and employment levels were steady but productivity advances were cited. There were slight reductions in cost and selling price inflation in February.
• The Philippines outperformed ASEAN in H2 2024 but is seeing slower growth in the sector in Q1 2025 with the PMI dropping to 51.0 from 52.3 driven by slower output and orders growth with overseas demand also softer. Inflation trends also moderated.

ASEAN S&P Global manufacturing PMIs