Latest news with #ASEANManufacturingPurchasingManagers'Index
Mint
04-08-2025
- Business
- Mint
Asia's manufacturing shows pockets of resilience amid trade turmoil—India surges, China slows
New Delhi: Manufacturing activity across Asia's export-driven economies showed a mixed picture in July, with early signs of resilience in some markets despite deepening global trade tensions and the US tariffs. India and Vietnam posted gains, while China's factory momentum softened. Meanwhile, much of Southeast Asia continued to struggle, dragged down by weak external demand and persistent uncertainty around global supply chains. The S&P Global ASEAN Manufacturing Purchasing Managers' Index (PMI) edged into expansion territory in July, rising to 50.1 from 48.6 in June, just above the neutral 50 mark that separates growth from contraction. The divergence in regional performance reflects broader shifts in global demand, China's ongoing economic challenges, and heightened geopolitical tensions that are beginning to reshape trade flows across Asia. India, Vietnam report strong growth India's manufacturing sector activity rose to a 16-month high in July on the back of expansion in output and new orders. The HSBC India Manufacturing PMI, compiled by S&P Global, rose to 59.1 in July from 58.4 in June. It was 57.6 in May, 58.2 in April. and 58.1 in March. A reading above 50 indicates expansion. The S&P Global Vietnam Manufacturing PMI was 52.4 in July, up from 48.9 in June and back above the 50 mark for the first time in four months. Vietnam's manufacturing sector returned to growth in July, driven by a rebound in new orders and rising production, even as exports remained weak due to tariffs and employment neared stabilisation, the PMI survey said. The Philippines and Thailand also recorded growth in manufacturing activity, though at a slower pace than India and Vietnam. Rising for the second consecutive month, the S&P Global Philippines Manufacturing PMI edged up to 50.9 in July from 50.7 in June, signalling a modest but strengthening recovery, the sharpest improvement in operating conditions since April. Despite reporting slower growth than India, Thailand's manufacturing sector expansion, like that of the Philippines, accelerated in July. Thailand's Manufacturing PMI rose to 51.9 in July from 51.7 in June, staying above the 50 mark for a third consecutive month and recording the sharpest improvement in factory conditions in nearly a year. China's momentum falters In China, manufacturing momentum lost steam, underscoring persistent structural challenges in the world's second-largest economy. The S&P Global China General Manufacturing PMI fell to 49.5 in July from 50.4 in June, In contrast, the Global Manufacturing PMI, compiled by S&P Global and sponsored by J.P. Morgan, slipped from 50.4 in June to 49.7 in July, signalling a mild deterioration in business conditions, the third decline in four months. Southeast Asia slows In contrast, several Southeast Asian manufacturing hubs continued to face headwinds in July. Indonesia's Manufacturing PMI edged up to 49.2 from 46.9 in June, marking a fourth consecutive month below the neutral 50 threshold, though the pace of contraction eased marginally. Malaysia's PMI rose to 49.7 in July from 49.3 in June, signalling a slight improvement but still indicating a mild deterioration in manufacturing health. It was the softest decline recorded in five months. Singapore's manufacturing momentum also softened, with the S&P Global PMI slipping to 51 in June from 51.5 in May. July data is expected on 5 August. Outlook clouded by trade frictions That said, the broader outlook remains clouded by escalating trade tensions, as Asian manufacturers grapple with a volatile global environment. Last week, US President Donald Trump announced reciprocal tariffs on Indian exports, imposing a 25% duty starting this month, along with additional penalties for purchasing oil and military hardware from US-sanctioned Russia. In comparison, tariffs on exports from Indonesia, the Philippines, and Cambodia are set at 19%, Vietnam at 20%, and Malaysia at 25%. Meanwhile, most Chinese goods continue to face a 30% US tariff, though China has lowered its reciprocal duties on American products to 10%. India, notably, is contending with higher reciprocal tariffs than many of its regional peers, raising fresh concerns for its export competitiveness. To this extent, Goldman Sachs Economic Research, in its report last week, trimmed its real GDP growth forecasts for India by 10 basis points for 2025 and 20 basis points for 2026, citing the impact of Trump's reciprocal tariff on Indian imports. The investment bank now projects India's economy to grow at 6.5% in 2025 and 6.4% in 2026. 'In our view, some of these tariffs are likely to be negotiated lower over time, and further downside risk to the growth trajectory mainly emanates from the uncertainty channel," Goldman Sachs said.
Fibre2Fashion
05-07-2025
- Business
- Fibre2Fashion
ASEAN manufacturing PMI slips to 48.6, sharpest decline since 2021
The S&P Global ASEAN Manufacturing Purchasing Managers' Index (PMI) posted 48.6—down from 49.2 in May—the index remained below the neutral 50 mark for the third consecutive month, signalling a modest but accelerating contraction. The ASEAN manufacturing sector slipped into contraction at the start of the second quarter, with the following months signalling further deteriorations in operating conditions. In fact, June marked the most worsening in the health of the sector since August 2021. A sharper decrease in new orders was accompanied by more substantial cuts to staffing levels and purchasing activity. Although production was also reduced, this was only marginal. Furthermore, despite a strongly optimistic outlook for output in the year ahead, confidence slightly waned since May and was historically subdued. This suggests a continuation of the lacklustre performance of the ASEAN manufacturing sector, S&P Global said in a press release. ASEAN's manufacturing sector saw its sharpest downturn since August 2021, with the S&P PMI falling to 48.6 in June. New orders, exports, employment, and purchasing activity declined, reflecting weakening demand. Despite subdued inflation and mild production cuts, business confidence remained historically low. S&P Global warns of ongoing downside risks due to global tensions and tariff uncertainties. Both new orders and output remained in contraction territory since April. Recent figures revealed a sharper decline in incoming new orders for ASEAN goods producers, marking the most significant drop since August 2021. The overall new orders landscape was once again hampered by declining foreign demand for ASEAN goods, which continued to worsen. In fact, the rate of decrease in new export orders was solid and the most pronounced in eight months. Meanwhile, the downturn in production remained shallow, with the rate of decrease consistent with that observed in May. Manufacturing companies across ASEAN aligned their purchasing of inputs and employment in line with the deteriorating demand picture. Both measures recorded steeper contractions, with payroll numbers being reduced to the greatest extent since October 2021. The latest ASEAN manufacturing performance was coupled with historically muted inflationary pressures. The rate of input price inflation softened further since May, to indicate only a modest increase in cost burdens, which was the slowest in just over five years. Although the pace of charge inflation accelerated during the month, manufacturers raised their prices only marginally, added the release. While goods producers were optimistic about an increase in output over the coming year, the overall degree of optimism diminished and was historically subdued. Sentiment is currently the second-least optimistic since July 2020, suggesting a muted manufacturing performance in the year ahead. 'The ASEAN manufacturing sector concluded the first half of the year on a worrying note, with the headline index dropping to a 46-month low. Production continued to contract, and new orders, purchasing activity, and employment all experienced sharper declines. Although subdued inflationary pressures may partially assist the sector in reviving sales, the current downside risks stemming from ongoing international tensions and tariff-related announcements inject uncertainty into the outlook for the year ahead,' said Maryam Baluch, economist at S&P Global Market Intelligence. Fibre2Fashion News Desk (SG)
The Star
04-06-2025
- Business
- The Star
Asean manufacturing sector records slight uptick in May amid challenging conditions - S&P Global
Workers assemble VinFast Auto Ltd. Feliz S electric scooters at the company's manufacturing plant in Hai Phong, Vietnam. - Bloomberg KUALA LUMPUR: The ASEAN manufacturing sector recorded a slight performance uptick in May, with the leading index inching up to 49.2 from 48.7 in April, according to the latest S&P Global ASEAN Manufacturing Purchasing Managers' Index (PMI). In a note, S&P Global said the modest uptick was supported by a softer and marginal rate of output contraction. "As a result, firms aligned their employment levels, purchasing activity, and stocks of input accordingly, with downturns in all areas showing less severity compared to April. "That said, new orders received at the ASEAN manufacturing sector fell at a quicker rate,' it said. S&P Global stated that key indicators, including output, new orders, employment, and raw material inventories, have all registered declines. "Vendor performance also deteriorated, (with) delivery times for inputs lengthening after remaining relatively stable the previous month,' it said. On a slightly more positive note, S&P Global noted that cost pressures have eased, with companies raising charges only marginally. "This adjustment, however, partly reflects a broader trend of declining demand within the market,' it said. S&P Global said new orders from international markets also weakened, signalling an overall challenging demand environment. "Though modest, the rates of contraction were the most marked since August 2021 and over the past five months, respectively,' it said. Regarding the output prospects, S&P Global stated that ASEAN manufacturers exhibited a slightly more optimistic outlook for the year ahead, despite the sector's subdued performance. However, it said the level of confidence remains historically weak, ranking as the second-lowest since July 2020. Commenting on the data, S&P Global Market Intelligence economist Maryam Baluch said the region's manufacturing sector continued to face challenges as it reached the midpoint of the second quarter, with operating conditions further worsening. She said the PMI data indicated that while the latest downturn has been milder -- partly due to softer contractions in output, employment, and purchasing activity -- the decline in new orders has intensified, marking the steepest drop since August 2021. "This notable decrease, along with a general sense of subdued optimism among industry panellists, suggests that the sector may face ongoing difficulties in achieving growth in the coming year,' she added. - Bernama
