Weaker Foreign Demand Weighing On Output/Confidence, Price Pressures Ease

The S&P Global ASEAN manufacturing PMI eased to 51.1 in May from 52.7, still signalling positive activity in the sector but at a slower rate. Order and output growth slowed but overseas demand continued to fall. All countries saw a decline except the Philippines but Indonesia, Thailand, Myanmar and the Philippines all remained above 50 in expansion territory. Businesses were generally positive regarding the outlook over the next year but confidence was at its weakest in almost 3 years as caution grows.

• Price pressures eased with input costs and output prices rising at their slowest rates in 30 and 28 months respectively, which is good news for the region’s central banks.
• The Indonesian manufacturing PMI fell to 50.3 in May from 52.7, barely in growth territory due to contracting new orders, which weighed on employment growth and business confidence. Foreign orders fell for the 12^th consecutive month. Input costs rose at their lowest since November 2020 and this along with softer demand meant that selling prices rose only marginally and well below average. Like in other countries, some businesses are discounting to attract customers. BI has been on hold since February.
• See Manufacturing PMIs Mixed Across ASEAN, Price Pressures Muted for details on countries released last week.

Source: MNI - Market News/S&P Global