Asia’s manufacturing recovery remains patchy
Asia’s factory activity weakened slightly in April, with output growth cooling and employment dropping in a sign of fragile confidence among manufacturers. Data from S&P Global indicates that Southeast Asia’s manufacturing economy continued to grow at the start of the second quarter, but signals about the sector’s health were mixed. The headline purchasing managers index stayed above the neutral 50.0 mark separating expansion from contraction for a fourth straight month in April, but slipped to 51.0 from 51.5 in March.
The readings suggest “the overall manufacturing recovery is starting to cool…and remains uneven," Chua Hak Bin, regional co-head of macro research at Maybank, told Dow Jones Newswires. Although new orders rose more quickly, signaling a further improvement in demand, S&P noted that most of the upturn came from domestic demand, with export sales stretching their downturn to a 23rd month. Production growth cooled, but more concerning is that manufacturing employment took a hit, dropping for the first time in six months, S&P said.
“While firms remain optimistic about future output, sentiment slipped to the joint-weakest in almost four years," Maryam Baluch, economist at S&P Global Market Intelligence, said in a report. By country, the surveys indicated improvements across four of the seven Asean constituents. Indonesia dethroned Singapore at the top of the rankings, while Thailand signaled the strongest deterioration.
April was another positive month for Indonesian manufacturing, with output and new orders rising at decent rates, said Paul Smith, economics director at S&P Global Market Intelligence. But there was “a little devil" in the details, he said. Export sales fell again, while declines in production
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