ASEAN Manufacturing Sector Slips Back into Contraction in June: IHS Markit

Jakarta: The ASEAN manufacturing sector fell back into contraction during June, according to latest IHS Markit Purchasing Managers’ Index (PMI™) data. 
 
According to the data, both output and new orders fell for the first time in four months, with the rate of decline in factory production the fastest for nearly a year. 
 
Consequently, firms recorded a weaker level of optimism towards output over the coming 12 months.

The headline PMI fell from 51.8 in May and below the neutral 50.0 mark to register at 49.0 in June. 
 
This signalled the first deterioration in the health of the sector since February, albeit marginal.
 
"The ASEAN manufacturing sector slipped back into contraction during June amid renewed falls in both output and new work. The rate of deterioration in the sector was only marginal, but nonetheless the quickest since last October," said IHS Markit economist Lewis Cooper in a press release on Thursday.
 
The most marked deterioration in conditions was seen in Malaysia, where the headline index dropped sharply from 51.3 in May to a near series low of 39.9 in June, reflecting stricter covid-19 containment
measures.
 
Elsewhere, both Vietnam and Singapore registered renewed deteriorations in the health of their respective manufacturing sectors. In the former, the headline index (44.1) signalled the sharpest fall since May 2020, while Singapore's PMI reading (46.5) was indicative of the strongest decline for ten months.
 
Thailand's manufacturing sector meanwhile saw a sustained downturn in June. The PMI (49.5) rose noticeably on the month to signal only a fractional rate of decline, however, as the sector
neared stabilisation. 
 
Positive news came from the Philippines in June, as the headline PMI registered above the neutral value of 50 for the first time in three months. That said, at 50.8, the index signalled only a mild upturn. 
 
Indonesia also signalled an expansion in June, extending the current sequence of growth to eight months. The headline PMI (53.5) pointed to a solid improvement overall, despite falling from May.

 
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