PMIs in Southeast Asia see normalisation but far from sustainability

Hanoi (VNA) – Gradual improvement in the purchasing managing indices (PMIs) across Southeast Asia shows some return to normalisation, but a sustained recovery is still far away, according to a report released by Barclays Research on August 3.

PMIs continue to be capped by still-weak demand, the report said, adding that confidence about the business environment in the near-term remains low, mirrored in the employment sub-index, which remains deep in contraction territory for all of Southeast Asia.

According to the report, it is likely that business sentiment is largely impacted by external demand conditions - the export orders sub-index remains materially below pre-COVID-19 levels, even for countries that showed large month-to-month improvement in the index reading.

The PMI reading for July in Indonesia and Thailand showed improvement over June's data following some lifting of restrictions last month, Barclays noted.

However, it said the improvement in Thailand has been much slower than expected, despite the country urgently re-opened its economy.
Meanwhile, the Philippines' manufacturing PMI declined to 48.4 points, down from 49.6 in June, due to impacts of tightening rules to prevent COVID-19 in some parts of the country such as Cebu, it said.

As Manila moves back into a tighter lockdown from August 4, Barclays said it is expecting the Philippines' PMI to fall deeper into contraction territory in August.

For now, Malaysia is the only country in Southeast Asia that has its PMI to be around 50-point level, reaching 51 in June and 50 in July./.