August Asean PMI data shows business improvement

KUALA LUMPUR: The Purchasing Managers’ Index (PMI) data for August 2022 signalled an eleventh monthly improvement in business conditions across the Asean manufacturing sector.

In its Global Asean Manufacturing PMI report, S&P Global Market Intelligence said growth was supported by quicker upturns in production levels and new factory orders.

The headline PMI posted at 52.3 in August, up from 52.2 in July, marking eleven months of expansion, with the latest reading indicating a solid improvement in the health of the Asean manufacturing sector.

For Malaysia, while the headline PMI figure was posted above the neutral 50 threshold for the fifth month running at Malaysian manufacturers (50.3), the pace of increase softened from July and signalled only a marginal improvement in operating conditions.

In Singapore, six of the seven constituents recorded improvements in operating conditions in August with the country registering the quickest upturn, and for the ninth month running.

That said, the rate of increase (56.8) softened from the survey high observed in July to the weakest since March.

Mild growth was noted at Indonesian manufacturers, thereby extending the current run of increase to 11 months.

“At 51.7, the rate of increase was the quickest in four months. Similarly, at 51.2, the Philippines also reported an improvement in business conditions,” it said.

Looking ahead 12 months, manufacturing companies remain hopeful of expansion in output.

The report said sentiment improved for the third month running with the degree of confidence the highest since November 2016.

Commenting on the Asean Manufacturing PMI data, S&P Global Market Intelligence economist, Maryam Baluch, said the August data signalled yet another modest expansion across the Asean manufacturing sector.

She said data suggested that higher production volumes and intakes of new orders resulted in firms raising employment and inventories.

“We also saw supply-side and inflationary pressures ease during the latest survey period. Lead times lengthened at the slowest pace

in 23 months, while input price inflation eased to the weakest in six months. Firms will hope these trends continue.

”Overall, client appetite across Asean nations remained strong. However, interest rate hikes will likely challenge demand in the coming months,” she added.