Business Conditions in ASEAN Improve at Strongest Pace in Nine Months

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Business operating conditions in the major ASEAN economies improved in May 2019 at their strongest rate in nine months, driven by faster growth in manufacturing output and new orders, the headline Nikkei ASEAN Manufacturing Purchasing Managers’ Index (PMI) compiled by IHS Markit showed on 4 June. 

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 rose from 50.4 in April to 50.6 in May, reaching the highest index reading since August 2018.

Five out of the seven monitored ASEAN economies recorded stronger operating conditions in May compared to the previous month. In Myanmar, business conditions improved at their fastest rate in 13 months, thanks to another marked increase in new orders. In Vietnam, producers reported solid manufacturing output growth and the quickest rise in new business so far in 2019. Indonesia and the Philippines recorded strong production growth, with Indonesia’s manufacturing sector booking a renewed rise in new orders after a slight drop in April, according to the ASEAN Manufacturing PMI.

Total employment across the seven monitored ASEAN economies was broadly unchanged from the level seen in April, while Myanmar firms reported the quickest rise in employment in their survey history, since 2015. 

“ASEAN manufacturing firms saw an established recovery of business conditions in May, building on the progress made after the downturn at the start of the year,” David Owen, Economist at IHS Markit, said, commenting on the survey data. 

“Output grew more strongly as firms enjoyed the quickest increase in sales for nine months. Specifically, the PMI signalled an improved picture for the region’s export market, which remained broadly stable following an eight-month sequence of decline,” Owen noted.