ASEAN Manufacturing PMI Eases As Orders Slow, Price Pressures Moderate

The March Global S&P manufacturing PMI for the ASEAN region eased to 51 from 51.5, below average, but importantly confidence ticked up. The results were mixed at a country level with 4 out of 7 seeing improving conditions. The result was driven by slower output and order growth. Employment and stocks of purchases contracted. Price pressures eased with output inflation reaching a 16-month low. (See press release here.)

• Indonesia’ PMI rose to 51.9 from 51.2 driven by faster new orders and output, which resulted in stronger employment and purchasing. The improvement in business confidence and expected future sales performance is positive for the outlook. While input costs rose, the trend remains one of easing inflation pressures. Producers were still able to pass on these higher costs but it was at a slower rate.
• Thailand’s PMI eased to 53.1 from 54.8 but remained the second strongest in the region. The decline was driven by declining new orders (including foreign orders) but output remained strong as the backlog of orders was worked through. Business confidence improved, implying the order weakness may be temporary, but optimism wasn’t reflected in hiring. Supply constraints continued and price pressures worsened signalling further BoT tightening ahead.
• The PMI in the Philippines eased slightly to 52.5 (Feb 52.7) and reported a welcome easing in price pressures. Malaysia and Singapore saw contractions in manufacturing at 48.8 (Feb 48.4) and 48.9 (50) respectively.

Source: MNI - Market News/Global S&P