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ASEAN’s IHS Markit Manufacturing PMI in August rose to 49 from July’s 46.5 amid a gradual decline in output and new orders in the region. The headline number for August indicates a sixth successive month of an overall decline in the region’s manufacturing sector.  


August manufacturing data indicates improvement in conditions, wherein the fall of PMI was the lowest in the last six months. Factory output stabilised and the decline in order booking volumes slowed, reducing the extent of economic contraction. Weak exports contributed majorly to the latest contraction in the index. 


Markit’s ASEAN Manufacturing PMI compiled data from around 2,100 manufacturers in Indonesia, Thailand, Singapore, Malaysia, Vietnam, the Philippines, and Myanmar. These countries account for 98pc of ASEAN manufacturing on a value-added basis. Across the seven countries, manufacturing output remained uneven, with only two countries posting an improvement in overall market conditions in August.


Performance of ASEAN’s manufacturing sector remained subdued, with companies cutting staff. The job loss was steep but with a lower decline since February. Enterprises reduced buying activity and inventories declined, although the pace of buying and the reduction stocks both eased. In August, the rate of inflation rose from July increasing cost burden, however, average output cost remained flat, while business sentiments and outlook for manufacturing output improved in August. 


In August, ASEAN’s manufacturing sector moved closer to stabilisation but is yet to witness any concrete indications of recovery. Manufacturers need a clear indication of improvement in client demand before raising output volumes, according to the report. 



Myanmar’s headline figure (53.2) was the highest for 15 months and indicative of a moderate improvement in operating conditions, driven by the quickest increase in output since April 2018. Indonesia was the only other country to record growth, but the headline PMI (50.8) signalled only a marginal rate of expansion. 


Indonesia – increased to 50.8 from 46.9 (July)

Indonesia’s Manufacturing PMI rose indicating an improvement as manufacturers reported solid increases in production and new orders. This is the first the index has improved to above 50 since February. Business confidence is at the highest since May and the country is gradually easing off the pandemic-related restrictions. Despite the improvement in production and sales, companies continued to cut jobs and buying activity in order to check costs. 


Indonesian companies witnessed the fastest growth rate in over six years amid easing of restriction but experts warn that the recovery could be due to pent-up demand. 


Malaysia – dropped to 49.3 from 50.0 

Malaysia’s Manufacturing PMI decreased indicating increases in the country’s GDP and manufacturing production, which stabilised in August. New orders continue to remain slow amid weak customer demand and focus on cost reduction. The index has lost some steam from its initial rebound post-lockdown following an expansion in June and July. 


Manufacturers were hit by weak demand in export markets and cost pressures amid a shortage of raw material. Overall, companies faced higher input cost, although it was slightly lower than in the past three months. Weak demand and strong competition also forced producers to offer discounts.


Thailand – increased to 49.7 from 45.9

Thailand’s PMI improved compared to its ASEAN counterparts as the country’s manufacturing sector moved closer to stabilisation in August. Manufacturing output in Thailand improved as production volumes and new orders increased marginally along with upbeat business confidence in recent months. Thailand’s Manufacturing PMI is the highest since January. Despite better sales, companies stayed away from new capacity investment and buying activity also reduced. Inventories shrunk but at a lower rate. 


The rise in production volumes is linked to an increase in new orders and work resumption at factories. Sales improved in Thailand despite a substantial drop in exports. Manufacturers average costs declined from July driven by price discounts provided by suppliers. Companies promptly passed on input cost benefits to customers bringing down output charges for the eighth consecutive month in August. Companies, however, cut purchases to maintain a lean inventory and reduce costs.


Vietnam – dropped to 45.7 from 47.6

Vietnam posted a sharper decline in manufacturing conditions in August. This is the second consecutive month of drop after a rebound in June, albeit less severe. 


Business conditions in Vietnam deteriorated due to the pandemic as output and new orders reduced amid weak customer demand and a steep drop in export orders. The Manufacturing PMI dropped for the eighth time in the past nine months. New work inflows to the sector reduced sharply amid restriction on movement, while some companies were forced to reduced capacity. 


Philippines – dropped to 47.3 from 48.4

The Philippines’ manufacturing sector was hit in August as the government tightened quarantine restrictions in Manila and nearby provinces. New orders decreased sharply, while inventories also declined. Input cost inflation rose to an 18-month high. The country’s Manufacturing PMI dropped for the second month in a row. 


Myanmar – increased to 53.2 from 51.7

Myanmar’s manufacturing sector staged a strong recovery in August after a severe contraction in 2020 due to the pandemic-related lockdowns. The Manufacturing PMI rose to a 15-month high. Manufacturers in Myanmar continued to benefit from lower input prices that allowed them to cut product prices to boost demand. 


Singapore – dropped to 43.0

Singapore dropped to the bottom of the ASEAN PMI rankings. The country’s headline PMI was at 43.0 in August indicating a significant deterioration in business conditions.



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