(Singapore, 5th) Amid trade tariff conflicts, ASEAN manufacturing experienced its first contraction in overall business conditions in 16 months in April. The Purchasing Managers' Index (PMI) dropped from 50.8 in March to 48.7, marking the largest decline since August 2021 and the lowest point in 57 months.
According to the latest data released by S&P Global on Monday (May 5), two core indicators in the ASEAN manufacturing PMI, new orders and output, ended their previous consecutive six-month and thirteen-month growth, respectively, encountering the most significant decline in nearly 44 months.
A PMI above 50 implies the manufacturing sector is expanding, while below 50 reflects contraction.
Due to the slowdown in production demand, business procurement activities decreased for the first time in six months, marking the largest decline since August 2021. The reduction in procurement also led to the first three-month decline in input inventories, alleviating supply chain pressures and improving supplier delivery performance for the first time in a year.
Manufacturers cut jobs for the second consecutive month in April, although the scale of job cuts remained moderate, it was the most significant level since April 2024.
Additionally, cost pressures facing businesses have eased. Input costs only slightly increased, with the growth rate being the lowest in four and a half years. The increase in product prices was consistent with last month, indicating overall price pressures remained moderate.
What is concerning is the significant decline in manufacturers' confidence about the future. Although the surveyed companies remain generally optimistic about their production outlook for the next year, confidence has fallen to its lowest level since July 2020, far below the historical average.
S&P Global Market Intelligence Economist Maryam Baluch stated: "The April PMI shows that ASEAN producers are facing tough conditions."
She added: "What is more concerning is that the confidence level of enterprises in April declined to the lowest point in 57 months, reflecting a sharp deterioration in manufacturer sentiment. This decline in confidence is worrying for the industry's ability to recover in the near term and suggests that businesses are preparing for potentially more challenges."
According to the latest data released by S&P Global on Monday (May 5), two core indicators in the ASEAN manufacturing PMI, new orders and output, ended their previous consecutive six-month and thirteen-month growth, respectively, encountering the most significant decline in nearly 44 months.
A PMI above 50 implies the manufacturing sector is expanding, while below 50 reflects contraction.
Due to the slowdown in production demand, business procurement activities decreased for the first time in six months, marking the largest decline since August 2021. The reduction in procurement also led to the first three-month decline in input inventories, alleviating supply chain pressures and improving supplier delivery performance for the first time in a year.
Manufacturers cut jobs for the second consecutive month in April, although the scale of job cuts remained moderate, it was the most significant level since April 2024.
Additionally, cost pressures facing businesses have eased. Input costs only slightly increased, with the growth rate being the lowest in four and a half years. The increase in product prices was consistent with last month, indicating overall price pressures remained moderate.
What is concerning is the significant decline in manufacturers' confidence about the future. Although the surveyed companies remain generally optimistic about their production outlook for the next year, confidence has fallen to its lowest level since July 2020, far below the historical average.
S&P Global Market Intelligence Economist Maryam Baluch stated: "The April PMI shows that ASEAN producers are facing tough conditions."
She added: "What is more concerning is that the confidence level of enterprises in April declined to the lowest point in 57 months, reflecting a sharp deterioration in manufacturer sentiment. This decline in confidence is worrying for the industry's ability to recover in the near term and suggests that businesses are preparing for potentially more challenges."