A worker prepares to blend soybeans at a tofu factory in Sawangan, Depok, West Java, Indonesia, on Thursday, Aug. 1, 2024. (Photo: CFP)
The average ASEAN Purchasing Managers' Index (PMI) for the whole year of 2024 was 51.0, indicating a trend of continued expansion in its member countries, according to the S&P Global ASEAN Manufacturing PMI report released on January 2.
Throughout the year, both output and new orders maintained sustained growth, demand and purchasing activities kept increasing, with eased inflationary pressures.
A PMI above 50 indicates that the manufacturing industry is expansionary, while below 50 means that the industry is in a waning state.
The S&P Global ASEAN Manufacturing PMI remained in the expansion range in each month of 2024, demonstrating the stability and resilience of the region's manufacturing sector.
New orders have increased for the 10th consecutive month, driven by strong domestic demand, but international demand is still weak. New export orders have contracted for 31 consecutive months, the main factor for dragging down the total order volume.
Overall, growth in new orders supported solid output expansion, with the growth in December unchanged from November.
In December 2024, manufacturers increased purchasing activities for the second consecutive month, with the growth rate being the fastest since August. However, pre-production stocks fell for the sixth consecutive month, which indicates that raw materials were used directly in production.
In addition, finished product inventories have also declined for the 20th consecutive month, showing that finished product inventory management is still relatively tight.
Data showed that price pressure eased significantly in December, and the inflation rate of input costs and output prices fell from the upward trend in November, reducing the operational burden on enterprises. However, employment levels fell slightly for the second consecutive month despite rising business demand.
An employee works inside a battery pack shop at a VinFast factory in Haiphong, Vietnam, on Saturday, Dec. 25, 2021. (Photo: CFP)
ASEAN manufacturing remains optimistic about output prospects for 2025, but confidence levels fell to an eight-month low and remained below the long-term average.
"The 2025 output outlook remains positive, but it waned slightly. Growth in new orders remains mild and heavily dependent on domestic demand, while weak international demand continues to hinder growth," noted Maryam Baluch, Economist at S&P Global Market Intelligence.
The S&P Global ASEAN Manufacturing PMI is compiled from replies to monthly questionnaires sent to purchasing managers in panels of manufacturers in seven ASEAN member countries: Indonesia, Malaysia, Myanmar, the Philippines, Singapore, Thailand, and Vietnam.
These countries account for 98% of ASEAN manufacturing value added, amounting to some 2,100 manufacturers.
The PMI is a weighted average of the following five indices: new orders (30%), output (25%), employment (20%), suppliers' delivery times (15%), and stocks of purchases (10%).
Reporter: Zhang Ruijun
Editor: Yuan Zixiang, James, Shen He
