The ASEAN manufacturing sector slipped into contraction territory for the third time in four months in December, official data showed Tuesday.

“The main driver of the deterioration was the deepening downturn in new orders, indicating softer overall demand conditions,” Maryam Baluch, economist at S&P Global Market Intelligence said. 

The headline S&P Global ASEAN Manufacturing Purchasing Managers’ Index fell to 49.7 in December after stabilising at 50.0 in November.  

Anything below 50.0 signals that the sector contracted during that month, while anything above indicates expansion.  

“The sustained fall in new business led to slower growth in output, with production rising only fractionally and at the weakest pace in 27 months,” Baluch said, “However, in some positive news, firms looked to increase their staff numbers and buying activity, though only slightly in each case.” 

Closer look at ASEAN manufacturing sector 

Myanmar’s goods producers faced a tough month with the headline index falling deeply to 42.9 in December from to 48.1 a month earlier.  

Thailand’s manufacturing sector saw conditions worsen too. The Thai manufacturing headline figure came in at 45.1, down from 47.6 in November. 

“At 45.1, the headline index signalled a sharp rate of deterioration that was the quickest in three-and-a-half years,” S&P Global said.

Malaysia reported a decline in conditions for its manufacturing sector with a PMI reading of 47.9, unchanged from the month before.  

Vietnam’s manufacturing sector headline reading came in at 48.9, improved from November’s 47.3 but still in contraction territory.  

Filipino goods producers logged a PMI of 51.5 in December, falling from 52.7 a month prior.  

Singapore’s manufacturing sector posted a headline figure of 52.0 in December, improved from 51.7 in November. 

Similarly, Indonesia’s good producers enjoyed an improvement in business conditions after the headline figure for December rose to 52.2 from 51.7 a month prior. 

“New business across the region has now declined in each of the past four months,” S&P Global said. 

“Demand conditions were weak across overseas markets as well, with new export business also falling again in December. Consequently, growth of factory output weakened, with the latest upturn the slowest in the current 27-month period of expansion.” 


Looking ahead, the laws of supply and demand will be at play with S&P Global Market Intelligence’s economist saying that demand weakness could hurt production in 2024.  

“While the recent downturn across ASEAN’s manufacturing sector is only mild overall, growing signs of demand weakness could result in fresh cuts to production as we move into 2024. Manufacturers across the region will be hoping for expansions in new orders to help support growth over the coming year,” Baluch said.  

The S&P Global ASEAN manufacturing PMI is compiled by S&P Global from responses to monthly questionnaires sent to purchasing managers in panels of manufacturers in Indonesia, Malaysia, Myanmar, the Philippines, Singapore, Thailand and Vietnam, totalling around 2,100 manufacturers. These countries account for 98% of ASEAN manufacturing value added, according to World Bank world development indicator. 

Data for the PMI were collected between December 6 and 18.