Nikkei ASEAN Manufacturing PMI Rises To 50.2 In January

KUALA LUMPUR, Feb 2 (Bernama) -- The headline Nikkei ASEAN Manufacturing Purchasing Managers' Index (PMI) stood at 50.2 in January 2018, from 49.9 in December 2017, a marginal improvement in the health of the sector across the region. Renewed increases in new orders and employment were key factors boosting the headline index, alongside a further rise in production, IHS Markit said in a statement Friday. Higher total new business intakes prompted ASEAN manufacturers to raise output further in January, although the rate of expansion was the same as that seen in the previous month and marginal. Employment also rose slightly in the latest survey period as businesses were more confident about the outlook for production in the year ahead. January data showed that the upturn was relatively broad-based, with five of the seven countries covered by the survey reporting an improvement in business conditions, up from four at the end of 2017, with only Indonesia and Singapore failing to see an improvement in sector conditions. Vietnam displaced the Philippines to lead the growth rankings across the region at the start of 2018 as growth in its manufacturing sector picked up to a nine-month high. Thai manufacturers registered a slightly quicker pace of improvement in operating conditions, while Malaysia returned to growth in January after business conditions were largely stagnant in December. Overall client demand improved in January, with survey data suggesting that higher domestic demand was a key reason for increased new orders. IHS Markit Principal Economist, Bernard Aw said the ASEAN manufacturing economy started 2018 on a positive footing, but growth remained fragile. “Both output and total new orders grew marginally, but export sales contracted for a second month running,” said Aw. Factories remained cautious about purchasing activity, which contributed to a further drop in inventories, he said, adding, while there was a slight increase in employment, the ongoing presence of spare capacity will likely weigh on hiring in coming months. Aw said encouragingly, business confidence about output in the year ahead remained strong, with optimism holding steady at a near one-year high. “Furthermore, recent depletion in stocks of finished goods could encourage manufacturers to raise production as part of efforts to replenish inventories,” he added. -- BERNAMA