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November 14, 2024
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ASEAN manufacturing growth sustained in October

ASEAN manufacturing growth sustained in October
A sustained, albeit once again only a marginal improvement in the health of the ASEAN manufacturing sector was recorded in October. A fresh rise in output was recorded, following the first fall in three years in September. Meanwhile demand trends improved for an eighth successive month, but at the weakest pace during this growth sequence.

Furthermore, job creation halted, and purchasing activity contracted for the first time in a year.

The headline S&P Global ASEAN Manufacturing Purchasing Managers’ Index™ (PMI®) held steady at 50.5 in October, unchanged from September, indicating the joint-weakest improvement in manufacturing conditions since February.

Although demand trends showed signs of improvement at the beginning of the final quarter, they experienced a cooling for the third consecutive month, resulting in only a slight uptick — the weakest in the current eight-month growth sequence.

Goods producers across ASEAN adjusted their buying activity and workforce numbers accordingly, with the former recording a drop for the first time in 12 months. Meanwhile, job creation stagnated following a fractional uptick in the month prior. Additionally, as has been the case since March, ASEAN manufacturers reported an increase in backlogs, indicating rising pressure on manufacturing capacity.

However, ongoing improvements in demand conditions enabled manufacturers to increase their output in October. The respective seasonally adjusted index shifted into expansion territory after posting its first sub-50 reading in three years in September.

In October, ASEAN manufacturers continued their destocking efforts, depleting both pre- and postproduction inventories for the fourth and eighteenth consecutive month, respectively.

In terms of prices, cost pressures simmered down, with input prices rising at the slowest pace in 15 months. Additionally, manufacturers raised their output prices at a modest pace. While the rate of charge inflation was slightly stronger than in September, it remained one of the slowest increases in the past four years and historically subdued.

Looking ahead, expectations for output remained positive across the ASEAN manufacturing sector. However, growth projections were downgraded as optimism dipped to a four-month low, continuing a trend of weaker expectations compared to the historical average since November 2022.

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