The beginning of the second quarter reflected a renewed weakening in the region’s manufacturing health, with notable declines in both output and new orders. In response to reduced production needs, companies scaled back purchasing activity and trimmed workforce numbers. Business sentiment also took a hit, with confidence in future output reaching its lowest level since July 2020.
The S&P Global ASEAN Manufacturing PMI fell to 48.7 in April, marking the first contraction since December 2023.
Output, new orders, purchasing activity, and employment all declined, while confidence hit a 57-month low.
Cost pressures eased, and supply chains slightly improved.
Firms remained cautiously optimistic, but sentiment was notably weaker, reflecting growing concerns about future recovery.
In April, the two key components of the PMI—new orders and output—saw renewed and marked declines, ending 13- and six-month growth streaks, respectively. Both experienced their steepest downturns in 44 months. Reflecting reduced production needs, firms cut back on purchasing activity for the first time in six months. Although modest, the decline was the sharpest since August 2021. Employment also fell for the second month running, with April’s job shedding slightly outpacing that of March, S&P Global said in a press release.
Staffing levels declined only slightly, yet the rate of reduction was the sharpest recorded since April 2024. S&P Global ASEAN Manufacturing PMI (seasonally adjusted), where a reading above 50 indicates an improvement from the previous month.
Reduced purchasing activity led to a decline in input inventories for the first time in three months. This drop in demand also eased pressure on supply chains, resulting in a marginal improvement in supplier performance—the first in a year. Cost pressures softened in April, with input costs rising only modestly and at the slowest pace in four-and-a-half years. Selling price inflation held steady and remained subdued overall, added the release.
Although firms retained a broadly positive outlook for the year ahead, overall sentiment declined significantly, with confidence dropping below the historical average to its lowest level since July 2020.
“April PMI data revealed a concerning picture for ASEAN goods producers, as the sector fell back into contraction for the first time in 16 months. Both output and new orders recorded renewed contractions, accompanied by reduced purchasing activity and a deepening downturn in job shedding,” said Maryam Baluch, economist at S&P Global Market Intelligence. “Even more troubling was the slump in confidence observed in April, which reached a 57-month low, signalling a significant loss in sentiment among manufacturers. This decline in confidence raises concerns about the sector’s ability to recover in the near term and suggests that firms may be bracing for further challenges ahead.”
Fibre2Fashion News Desk (SG)
