ASEAN PMI reaches five‑month peak in July

This is thanks to a faster growth in new orders and output.

ASEAN manufacturing activity strengthened in July as faster growth in new orders and output lifted the region’s Purchasing Managers’ Index to a five‑month high despite a weaker second quarter.

The S&P Global ASEAN Manufacturing PMI rose to 52.8 in July from 50.5 in June, marking the strongest improvement in operating conditions in five months.

Amongst the seven monitored economies, all except Myanmar recorded stronger operating conditions after a weaker second quarter.

Growth in new orders reached its strongest pace since February, whilst production expanded at its fastest rate in five months.

Manufacturers responded by increasing purchasing activity, and employment rose for the first time since March.

"The ASEAN manufacturing sector appears to have moved past the softer patch seen between March and June, when activity was still heavily affected by the ongoing conflict in the Middle East," said Maryam Baluch, Economist at S&P Global Market Intelligence.

Baluch said performance was now on par with that at the turn of the year, although it remained below the record level reached in February.

Suppliers' delivery times lengthened moderately during the month, whilst manufacturers increased stocks of purchases for the first time in four months despite the longer delivery times.

Employment growth did not match production requirements, leading backlogs of work to increase at the fastest pace since October.

Price pressures eased further from April's spike, although input costs continued to increase sharply, with manufacturers passing higher costs on to customers through higher selling prices.

Business confidence strengthened to its highest level since April 2023, with manufacturers expecting output to increase over the coming year.

"Demand conditions improved in July, with new orders rising strongly and production increasing solidly in response," Baluch said.

She said improved demand conditions led manufacturers to increase purchasing activity and raise employment for the first time in four months.

She added that confidence in future output reached its highest level in more than three years as price pressures continued to moderate.