ASEAN Manufacturing Sees Stronger Growth, Indonesia Outperforms

The S&P Global ASEAN manufacturing PMI rose further into expansion territory in March at 51.5 from 50.4. The improvement was driven by positive domestic new orders growth which resulted in a pickup in production and employment, but foreign orders contracted. Only the Philippines and Indonesia are in expansionary territory above 50. Most of ASEAN is optimistic looking forward.

• Indonesia’s manufacturing PMI rose to 54.2 from 52.7, the highest since October 2021, but with minimal capacity pressures there was no change in employment. The increase in growth was driven by a sharp rise in domestic new orders and thus in output to its fastest in over two years. Foreign orders contracted though. Costs rose strongly, especially due to the exchange rate, but robust demand enabled them to be passed onto customers with selling prices rising to an almost two year high and at an above average rate.
• The Philippines PMI eased only 0.1 point to 50.9 but production shrank due to input shortages, while orders growth is lacklustre but enough for hiring to rise. Selling price fell even though costs rose but at a lower rate. Confidence in the outlook is weak.
• Manufacturing activity in Thailand continued to shrink but it eased considerably in March with the PMI at 49.1 up from 45.3. The improvement was driven by rising output but orders and employment continue to shrink, although at a slower pace. The outlook was its most positive in almost a year. Cost and price pressures eased.

Source: MNI - Market News/Bloomberg