Manufacturing PMIs Mixed Across ASEAN, Price Pressures Muted

Global S&P manufacturing PMIs across ASEAN were mixed in May with some showing activity continues to grow while in other countries it is contracting. The ASEAN aggregate and Indonesia’s PMI are published on June 5.

• Thailand’s PMI eased from its April record of 60.4 to 58.2 in May, which is still very strong and has been above 50 for 17 months. Demand is rising strongly, even foreign orders improved, and so employment picked up slightly. It is signalling that manufacturing output should begin to recover soon, as April fell 8.1% y/y with capacity utilisation falling to 53.8% from 66.5%. Business confidence remained positive but was negatively impacted by the macro uncertainty. Input costs increased further but output inflation rose at its slowest in 19 months and is below average.
• Manufacturing growth rose further in the Philippines with the PMI rising to 52.2 from 51.4 driven by stronger production and new orders (domestically & from overseas). This was the 16^th consecutive month of growth. As a result, employment picked up. Producers were generally optimistic about the outlook. Unfortunately, price pressures intensified in May; given the Philippines has one of the highest inflation rates in Asia. Higher cost inflation was passed onto customers but input and output measures were below series averages.
• Malaysia saw the pace of manufacturing contraction deteriorate with the PMI falling to 47.8 from 48.8 due to weak demand, output and employment. Businesses were generally positive on the outlook as they expect demand to improve. While input costs and output prices rose, the move was muted.