ASEAN PMIs Generally Optimistic, Challenging Global Growth Conditions

The February manufacturing S&P Global PMIs in Thailand and Indonesia were fairly stable while the Philippines fell and Malaysia was higher. For ASEAN as a whole the PMI improved to 51.5 from 51.0, driven by new orders and output. It was its 17^th consecutive month in expansionary territory. The challenging global growth environment is impacting foreign orders for this region though.

• Thailand’s manufacturing PMI was the strongest in the region rising to 54.8 from 54.5, the fastest since September 2022. However, while new orders improved they remained moderate and producers worked through their order backlog. Foreign orders continued to contract but only slightly. Output growth was its fastest on record. Business confidence improved in February. S&P Global reported that supply constraints persisted in Thailand thus input cost inflation rose and firms are still able to pass those costs on.
• Indonesia’s PMI was stable at 51.2 after 51.3 in January. Business confidence declined to its lowest in almost three years. Output in February was domestically driven as foreign orders continued to fall. There are signs of easing supply constraints with improved shipping efficiency and a shortening of supplier delivery times. Price pressures eased with input cost inflation the slowest since November 2020 and while costs are still being passed onto customers the increase in selling prices was moderate, consistent with BI pausing its tightening.