Business Conditions Across ASEAN Improved in March

Business conditions across the biggest economies in ASEAN improved in
March for the first time in 2019, with stronger output growth and rising
new orders, the headline Nikkei ASEAN Manufacturing Purchasing
Managers’ Index (PMI) showed on 1 April.

The ASEAN Manufacturing PMI is produced by IHS Markit and is based on
original survey data collected from around 2,100 manufacturing firms
from Indonesia, Malaysia, Myanmar, the Philippines, Singapore, Thailand,
and Vietnam. Taken together, those seven countries account for an
estimated 98 percent of manufacturing activity in the ASEAN bloc.

The headline PMI increased from 49.6 in February to 50.3 in
March—above the important 50.0 threshold which separates business
growth from contraction.

ASEAN manufacturers reported a slight rebound in new orders for last
month, which marked the first rise in orders so far in 2019. Businesses
also reported the softest drop in exports in three months. As a result,
manufacturers across the major ASEAN economies accelerated the pace of
output. Growth rate in output was at a three-month high in March, with
five of the seven monitored countries booking increased production.

Myanmar continued to show the sharpest improvement in business
conditions, while output growth in Vietnam was at its quickest pace since

November 2018, according to the ASEAN Manufacturing PMI.
At the end of the first quarter, the business outlook for the next 12
months across the seven monitored economies remained positive.

“The ASEAN Manufacturing PMI crept back above the 50.0 mark in March,
signalling the first improvement in operating conditions this year. The
survey found that a slight rise in sales and production growth lifted
business sentiment,” David Owen, Economist at IHS Markit, said,
commenting on the ASEAN Manufacturing PMI survey data.

“On the other hand, manufacturers will be encouraged by reports of even
softer cost pressures in March. The rate of input price inflation dropped to
a record low, as material prices remained subdued compared to last year.
Naturally, this should help companies manage their balance sheets in this
particularly difficult period,” Owen noted.