Lower Orders Weighing On Asian Manufacturing

Manufacturing PMIs across Asia have fallen in October with most now in contractionary territory. Indonesia is the highlight with the S&P Global PMI still above the breakeven-50 mark even though it fell. Singapore and the Philippines were above 50 in September but their October data is not out until November 3 with the ASEAN aggregate.

• Indonesia’s S&P Global manufacturing PMI eased to 51.5 from 52.3 signalling a slowdown in industrial activity growth. The moderation is due to slower orders growth particularly from overseas. Exports contracted slightly in October. As a result business confidence is at its least optimistic since February and employment was cut marginally.
• Costs for Indonesia’s manufacturers continued to rise from transport, raw materials and financing and at the fastest pace since March. Due to weaker demand though they were only partially passed on to selling prices, so inflation fell from September.
• The S&P Global manufacturing PMI for Thailand deteriorated to 47.5 from 47.8 after being as high as 60.4 only 6-months ago. The drop was due to shrinking new orders including from overseas. But production growth was positive as businesses worked through order backlogs. But with orders down for the fourth straight month employment and purchasing activity were reduced. Business confidence was lower but still optimistic.
• Thai input costs eased again due to substituting towards cheaper but slower transport options. Selling price inflation rose in October but remains below average.
• Malaysia’s PMI was steady in October at 46.8 suggesting that manufacturing activity continued to shrink at the start of Q4. New orders and thus output are weighing on activity in the sector.
• See reports here.

Source: MNI - Market News/Bloomberg