Slower Orders And Deteriorating Optimism Point To Slower ASEAN Output

The S&P Global ASEAN manufacturing PMI in December printed at 50.3 down from 50.7 the previous month, the slowest rate of expansion for 15 months. The headline was supported by an improvement in operating conditions. New orders fell at a faster pace than the previous month, suggesting that output is likely to struggle in 2023 in line with the deterioration in confidence. Businesses cited the global growth outlook, inflation and spending cuts by their customers as their main concerns. On a better note, price pressures eased.

• Output price inflation rose at its lowest rate for 11-months but remained elevated, and input inflation was its lowest for 2 years. But supply chain issues continued across ASEAN due to difficulties with shipping and sourcing inputs.
• Manufacturing PMIs rose in Indonesia (50.9), Thailand (52.5) and the Philippines (53.1) but fell in Singapore, Malaysia (47.8), Vietnam (46.4) and Myanmar (42.1).
• Orders contracted in the region for the second consecutive month. As a result, job losses accelerated in December, especially as backlogs fell at their fastest rate in over two years.