Workers assemble VinFast Auto Ltd. Feliz S electric scooters at the company's manufacturing plant in Hai Phong, Vietnam. - Bloomberg
KUALA LUMPUR: The ASEAN manufacturing sector recorded a slight performance uptick in May, with the leading index inching up to 49.2 from 48.7 in April, according to the latest S&P Global ASEAN Manufacturing Purchasing Managers’ Index (PMI).
In a note, S&P Global said the modest uptick was supported by a softer and marginal rate of output contraction.
"As a result, firms aligned their employment levels, purchasing activity, and stocks of input accordingly, with downturns in all areas showing less severity compared to April.
"That said, new orders received at the ASEAN manufacturing sector fell at a quicker rate,” it said.
S&P Global stated that key indicators, including output, new orders, employment, and raw material inventories, have all registered declines.
"Vendor performance also deteriorated, (with) delivery times for inputs lengthening after remaining relatively stable the previous month,” it said.
On a slightly more positive note, S&P Global noted that cost pressures have eased, with companies raising charges only marginally.
"This adjustment, however, partly reflects a broader trend of declining demand within the market,” it said.
S&P Global said new orders from international markets also weakened, signalling an overall challenging demand environment.
"Though modest, the rates of contraction were the most marked since August 2021 and over the past five months, respectively,” it said.
Regarding the output prospects, S&P Global stated that ASEAN manufacturers exhibited a slightly more optimistic outlook for the year ahead, despite the sector’s subdued performance.
However, it said the level of confidence remains historically weak, ranking as the second-lowest since July 2020.
Commenting on the data, S&P Global Market Intelligence economist Maryam Baluch said the region’s manufacturing sector continued to face challenges as it reached the midpoint of the second quarter, with operating conditions further worsening.
She said the PMI data indicated that while the latest downturn has been milder -- partly due to softer contractions in output, employment, and purchasing activity -- the decline in new orders has intensified, marking the steepest drop since August 2021.
"This notable decrease, along with a general sense of subdued optimism among industry panellists, suggests that the sector may face ongoing difficulties in achieving growth in the coming year,” she added. - Bernama
