The increase marked the first uptick in three months and signalled a moderate strengthening in manufacturing activity across the region. A PMI reading above 50 indicates expansion.
Growth in new orders accelerated to a three-month high in May and remained historically strong, helping manufacturers increase production at a faster pace after output had recorded only a fractional rise in April. Purchasing activity also expanded at a similar rate as firms responded to stronger demand conditions, S&P Global said in a press release.
ASEAN manufacturing activity strengthened in May 2026, with the S&P Global ASEAN Manufacturing PMI rising to 51.5 from 50.7 in April.
Stronger new orders and faster output growth supported the improvement, while business confidence reached a four-month high.
However, export sales declined for a third consecutive month amid weak external demand.
Price pressures remained elevated despite easing slightly.
However, export demand continued to weaken. Export sales declined for the third straight month, with the latest contraction being the sharpest since September 2024, reflecting persistent softness in external markets.
Manufacturers also continued to face supply-chain pressures, although supplier delivery delays eased to the weakest level in nine months. To support production requirements, companies reduced inventories, with both stocks of purchases and finished goods declining marginally during the month.
Price pressures remained substantial across the ASEAN manufacturing sector, though inflationary trends softened compared to April. Input costs and output charges both continued to rise at historically elevated rates, albeit at weaker paces.
Business confidence improved further in May, with sentiment regarding production over the next 12 months reaching a four-month high. Firms expressed optimism that output growth would continue in the months ahead despite ongoing external demand challenges.
Maryam Baluch, economist at S&P Global Market Intelligence said, “ASEAN manufacturers highlighted a stronger improvement in operating conditions midway through the second quarter. This marked a shift from the consecutive monthly slowdown since the Middle East conflict began in February. Growth in new orders reached a three-month high, indicating a solid increase, and output rose at a moderate pace after a sluggish April.
“Purchasing activity also increased, but firms remained cautious about expanding employment, with May showing a slight decline in jobs. Despite this, optimism about future output growth and improving business confidence could support job creation in the coming months.
“However, ongoing trade disruptions and inflationary pressures, driven by the current war, will continue to act as headwinds to growth.”
The latest survey data, collected between May 12 and May 22, showed that ASEAN manufacturing activity remained in expansion territory for the eleventh consecutive month.
Fibre2Fashion News Desk (SG)
