ASIA: Manufacturing Activity Slows As Falling Export Orders Weigh On The Sector

The S&P Global ASEAN manufacturing PMI moderated to 51.1 in August from 51.6, the lowest since April. The slowdown in growth was driven by slower output, orders and job shedding. While four of the seven countries in the region had PMIs in expansionary territory, only Singapore saw a rise in August.

• While total orders continue to grow, they were at their slowest in 8 months and driven by domestic demand as the contraction in export orders persisted, which S&P Global said was “sharp”. This is weighing on output growth, which was its lowest in four months, resulting in job cuts and inventories rundown at a faster rate.
• Input cost inflation moderated and with softer demand so did selling inflation. Both are running below the series averages. Central banks in the region are expected to ease monetary policy by year end as inflation is contained.
• Despite subdued current conditions, optimism re the outlook for the year ahead improved to its highest in six months but remains below average.
• Singapore was the only country to see an increase in the PMI as it rose to 57.6 from 57.2. Manufacturing activity in Vietnam, Thailand and the Philippines grew but at slower rates, while Indonesia, Malaysia and Myanmar contracted. 

ASEAN S&P Global manufacturing PMIs