The index reading was the lowest recorded in 15 months.
The ASEAN manufacturing sector saw its operating conditions slip with headline purchasing managers’ index (PMI) falling from 50.5 in September to 49.8 in October, according to Nikkei’s ASEAN Manufacturing PMI survey data.
The index reading was the lowest recorded in 15 months and it marked the first time since December 2017 that PMI posted below the no-change 50.0 level, the report revealed.
“Most countries saw falls in both output and new business, whilst export orders dropped at the quickest pace in nearly two years,” IHS Markit economist David Owen said.
Manufacturing performance remained uneven across the region as three of the seven countries surveyed reported an improvement in operating conditions.
The Philippines topped the ASEAN manufacturing rankings once again with a PMI of 54.0 following an increase in output and new orders. It was followed by Vietnam (53.9) and Indonesia (50.5). Coming in at last place was Singapore which reported a sharp decrease in its PMI that fell to 43.3 due to the declining health of its manufacturing sector.
Meanwhile, new export orders decreased at a faster rate in October due to subdued demand from overseas markets, whilst purchasing activity at ASEAN manufacturing firms decreased following output growth falling to a 15-month low.
In addition, the report noted that ASEAN manufacturing firms experienced sharp inflationary pressures in October.
“Notably, Myanmar, the Philippines and Indonesia experienced substantial price increases,” Nikkei stated. “Survey respondents pointed to higher raw material costs and exchange rate factors as influencing the rise in input prices.”
Nevertheless, ASEAN manufacturing businesses continued to retain a strong positive outlook for the coming year amidst operating conditions deteriorating in October, Owen noted.
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