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Manufacturing conditions across the ASEAN region experienced their strongest improvement in seven months during February, according to the latest S&P Global ASEAN Manufacturing Purchasing Managers’ Index (PMI).
The index rose to 51.5 from 50.4 in January, marking continued monthly gains since the start of 2024.
Manufacturing output increased at its fastest pace since July 2023. Employment levels expanded at an accelerated rate. Business confidence soared to a 22-month high. New orders saw a solid and quicker uptick, driving production growth.
Following modest gains observed from September 2023 through January 2024, February recorded a notable surge in manufacturing activity. Businesses responded to the increase in new orders by expanding operational capacity, leading to stronger growth in both employment and purchasing activity.
ASEAN manufacturers showed heightened confidence in production prospects, bringing the index closer to its long-term average. This optimism led firms to bolster their inventories and increase their purchasing activity. Notably, purchase stock levels grew for the first time in eight months, reflecting a positive outlook for future demand.
February's report indicated that rising production requirements and anticipated workload increases prompted firms to enhance their operational capabilities. While backlog accumulation extended its year-long trend, the rate of increase slowed compared to January. This suggests that production support measures helped ease capacity pressures.
Cost pressures remained stable in February, aligning with January's levels. Meanwhile, output charge inflation remained modest, with rates of inflation continuing to be weaker than their respective series averages. This stability suggests that cost increases are not significantly impacting manufacturers' pricing strategies at present.
“February saw a significant improvement in ASEAN manufacturing conditions. Strong underlying demand trends contributed to solid growth in total new orders, prompting firms to increase their production levels at a comparable pace. Optimism strengthened among manufacturers, with projections for the year ahead outlook for output reaching its highest in 22 months. In preparation for higher workloads and to meet current production needs, both employment and input purchases were also increased. Encouragingly, despite the recent uptick in activity within the region's manufacturing sector, inflationary pressures remained contained and historically subdued,“Maryam Baluch, Economist at S&P Global Market Intelligence, said in a release.
Fibre2Fashion News Desk (HU)