Thai manufacturing sector shrinks for 5th month amid ASEAN slowdown
The purchasing managers' Index (PMI) for the ASEAN region fell for the third straight month in December, dropping 0.3 points from November to 49.7.
The fall reflected a rapid decline in new orders, to the lowest level in 28 months. This led to a decrease in new export orders and weakened overall output, marking the slowest growth in the manufacturing sector in 27 months.
Four of the seven ASEAN countries surveyed suffered a drop in PMI last month. Thailand ranked second from bottom with a PMI of 45.1 in December, marking the fifth consecutive month of contraction and the biggest decline in the past three and a half years. Only strife-torn Myanmar registered a bigger drop with a 12-month low of 42.9.
Malaysia recorded a PMI of 47.9, unchanged from the previous month but still indicating contraction for 16 consecutive months. Vietnam improved to 48.9.
On the positive side, the Philippines’ PMI was 51.5, the lowest in three months but still reflecting moderate growth. Singapore and Indonesia registered their highest PMI rises in six and three months, respectively.
Maryam Baluch, an economist for Economic Indices at S&P Global Market Intelligence, commented that ASEAN’s manufacturing sector has weakened over the past few months.
The slowdown is being driven by delayed new orders, signalling overall economic fragility. The rate of contraction remains moderate but is the most pronounced in almost two and a half years, Baluch said.
The decline in new business has affected production, with output growth increasing only slightly and at the weakest rate in 27 months. On the upside, some companies said they were hiring more staff and engaging in purchasing activities, albeit on a small scale in each case.
