ASEAN Manufacturing Sector Continues to Improve

Jakarta: The S&P Global ASEAN Manufacturing Purchasing Manager Index™ (PMI™)
posted 52.2 in July 2022, up from 52.0 in June 2022.
 
The headline PMI posted above the neutral 50.0 threshold that separates growth from contraction for the tenth successive month. 
 
The latest figure signalled yet another modest improvement in operating conditions across the ASEAN manufacturing sector.

Singapore led the rankings table in July, a trend observed since December 2021, with manufacturers recording a fresh new survey-high, and for a second\ month in a row during July. At 60.0, the headline figure was the highest reading ever recorded across all ASEAN manufacturers.
 
Thailand climbed up the rankings in July with business conditions improving at a quicker rate. Moreover, the latest reading of 52.4, was just below the record-high registered back in February. 
 
Elsewhere, after marking the weakest improvement in ten months during June, growth also picked up across goods producers in Indonesia. At 51.3 in July, the overall improvement was modest.
 
Vietnam followed closely behind, noting a softer improvement in operating conditions compared to that seen in June. The headline PMI index (51.2) highlighted the weakest growth in the current 10- month expansion period.
 
Muted rates of expansion were also noted in the Philippines (50.8) and Malaysia (50.6). However, while the Philippines experienced the slowest improvement in six months, the PMI reading for Malaysia hit a three-month high in July.
 
Myanmar was the only ASEAN country to report a contraction across its manufacturing sector during July. The latest reduction (46.5) was the quickest
since October 2021. 
 
“The latest PMI data indicated further growth in the ASEAN manufacturing sector, with the latest figure improving from June’s three-month low. Improved demand conditions and easing pandemic restrictions boosted production and sales volumes. Furthermore, rising business requirements resulted in a marginal increase in staffing level,” Maryam Baluch, Economist at S&P Global Market Intelligence said in a press release on Monday.
 
“While all nations except Myanmar signalled an improvement in the health of their respective manufacturing sectors during July, the rates of increase across the constituents highlighted a varying narrative. Growth across Singapore was strong as the PMI hit a new series high, and for the second month in a row. At the same time, slowdowns where visible across the Philippines and Vietnam, with the latest improvements the weakest in six, and ten months, respectively, Baluch added.
 
According to Baluch, price pressures remain persistently high, despite easing marginally on the month. 
 
In response, central banks around the region are likely to exercise tighter monetary policies. 
 
This could potentially impact growth momentum and demand in the coming months,
which continues to find its bearing as the COVID-19 shocks subside.
 

(WAH)