KUALA LUMPUR (Dec 1): Growth across the Asean manufacturing sector reported a slowdown for the second consecutive month during November, amid falling factory orders for the first time in 14 months, as a result of reduced client activity, according to S&P Global’s latest purchasing managers index (PMI) survey.

Firms registered a weaker rise in purchasing activity, and staffing levels fell for the first time since June, it said. 

The Asean headline PMI registered 50.7 in November ⁠— down from 51.6 in October ⁠— signaling only a mild improvement in operating conditions. 

“While the latest reading remained above the crucial 50.0 no-change mark to indicate a 10th monthly improvement in the health of the Asean manufacturing sector, the rate of growth was the slowest seen over this period and only marginal,” said S&P Global. 

Four of the Asean nations covered by the S&P Global survey reported an improvement in operating conditions in November, compared with three that registered a deterioration, with Singapore remaining the top performer, with a headline PMI reading of 56.0 — unchanged from October. 

Conditions also improved across the Filipino manufacturing sector, with the latest PMI figure of 52.7 pointing to a strong upturn that was fractionally quicker than that seen in October.

Meanwhile, Thailand (51.1) and Indonesia (50.3) were the only two other nations to report growth across their manufacturing sector. That said, both nations reported a loss of momentum for the second month running, and registered the lowest headline index readings since June, said S&P Global. 

Manufacturing conditions across Malaysia deteriorated in November for the third month running, as the headline index hit a 15-month low of 47.9. 

“Vietnam also recorded a decline in the health of its manufacturing sector. At 47.4, the respective PMI slipped below the neutral 50.0 level for the first time since September 2021, and pointed to a solid rate of deterioration.

“Myanmar’s manufacturing sector posted the weakest performance overall. Notably, operating conditions deteriorated at the second-sharpest rate since the current run of contraction began in May (with the PMI at 44.6),” S&P Global noted. 

Turning to prices, cost pressures across the Asean manufacturing sector remained elevated in November, as a result of high material and energy prices. However, the rate of input cost inflation eased midway through the final quarter, according to S&P Global. 

Notably, it said, average cost burdens rose at the weakest rate in 22 months, while charges levied by Asean manufacturing firms rose at the softest pace since January.

Business expectations regarding the 12-month outlook for output weakened from October’s multi-year high to the lowest since February, with the index posting below its long-run average.

S&P Global Market Intelligence economist Maryam Baluch said that more central banks across the region may look to tighten monetary policy, as currency weakness as well as rising raw material and energy prices continue to exert upwards pressure on prices. 

“The slowdown across the region raises the risk of the sector falling into a decline in the coming months, as high inflation and tighter financial conditions could weigh further on demand,” she added.