Singapore (TDI): Manufacturing activity across ASEAN strengthened in July as stronger new orders and output pushed the region’s Purchasing Managers’ Index (PMI) to a five-month high.
The S&P Global ASEAN Manufacturing PMI rose to 52.8 in July from 50.5 in June, marking the strongest improvement in operating conditions since February. Of the seven ASEAN economies monitored in the survey, all except Myanmar recorded stronger operating conditions, following a weaker second quarter.
New orders grew at their fastest pace since February, while manufacturing output expanded at its strongest rate in five months. The improvement in demand prompted manufacturers to increase purchasing activity, while employment rose for the first time since March.
Supplier delivery times lengthened moderately during July, while manufacturers increased their stocks of purchases for the first time in four months despite longer delivery times. Employment growth, however, failed to keep pace with production requirements, resulting in a rise in backlogs of work at the fastest rate since October.
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Price pressures continued to ease from the peak recorded in April, although input costs remained elevated. Manufacturers responded by passing higher costs on to customers through increased selling prices. Business confidence also strengthened, reaching its highest level since April 2023, as manufacturers anticipated further growth in output over the coming year.
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Confidence in future output also reached its highest level in more than three years, while price pressures continued to moderate. The latest PMI reading suggests that ASEAN’s manufacturing sector is regaining momentum after the softer conditions recorded during the second quarter.
