Performance of the manufacturing sector in the Philippines and Singapore posted the biggest deterioration among surveyed Southeast Asian countries, according to the latest Manufacturing Purchasing Managers’ Index of IHS Markit.
ASEAN’s headline PMI for March plunged to 43.4, the lowest for nearly eight years.
Readings above 50 reflect improvement in the sector, while indices below 50 show deterioration.
Singapore’s manufacturing PMI in March registered 27.7, Philippines at 39.7, Vietnam at 41.9, Indonesia and Myanmar at 45.3, Thailand at 46.7, and Malaysia at 48.4.
ASEAN’s manufacturing sector fell last month due to contractions in terms of output, new orders, inventories, and employment, the survey said.
“Restrictive measures stemming from efforts to contain the Covid-19 (coronavirus disease 2019) outbreak and substantial uncertainty surrounding the outlook also eroded firms output expectations during March,” the IHS Markit report said.
Of the seven surveyed Asean countries, Malaysia, the Philippines, and Thailand imposed lockdown last month. Vietnam just announced the same measure on the last day of March.
For the Philippines, the Luzon-wide community quarantine dragged the country’s manufacturing performance for the month.
“The Covid-19 pandemic took its toll on goods production in the Philippines in March, as the enforced lockdown of Luzon island led many manufacturers to halt operations until restrictions are lifted. These shutdowns led to sharp declines across the sector, with output, new orders, employment and stocks of purchases all falling at record paces,” IHS Markit economist David Owen said.
Owen added that with the uncertainties of the situation brought by the Covid-19 pandemic, businesses were much less optimistic about their operation for the next 12 months.
Another IHS Markit economist, Lewis Cooper, forecasted that ASEAN’s manufacturing sector will continue to decline for several months amid the Covid-19 outbreak.
As of April 1, reported Covid-19 cases in Asean reached 9,934 with highest confirmed cases in Malaysia at 2,766 and the Philippines at 2,311.