ASEAN’s PMI slips to 11-month low in January

Order book volumes and output only slightly increased.

The Association of Southeast Asian Nations (ASEAN) manufacturing purchasing managers’ index (PMI) slipped to an 11-month low reading of 50.4, down from 50.7 in December according to an S&P Global report.

The improvement in operating conditions was highlighted by only slight increases in order book volumes and output. Both slowly grew, with the most recent gains being the weakest observed in 11 months.

In light of the slight slowdown in manufacturing demands, input purchasing activity amongst manufacturers increased at a more subdued pace in January.

However, backlogs continued to rise indicating increasing pressures on capacity. The eleventh consecutive monthly uptick in outstanding work was the strongest since September last year.

Manufacturers also recorded a subtle shift in their hiring practices after minimal reductions were recorded in November and December last year.

Moreover, destocking remained steady as firms modestly reduced purchases and finished goods to meet production needs amidst ongoing supply challenges.

Further, January data revealed input price inflation slowed for the second consecutive month, marking the weakest increase in operating costs since July 2023.

Lastly, the level of business confidence across ASEAN manufacturers remained broadly unchanged from that seen in December. Whilst firms anticipate output to rise in the coming year, optimism remained subdued.