Factory production rose for the second straight month, with the rate of growth edging up to the quickest seen for two-and-ahalf years. The increase was supported by the strongest upturn in new orders since August 2018.
Improved conditions also boosted business confidence at the end of the fourth quarter. The level of positive sentiment was the highest since before the onset of the pandemic in January.
The headline PMI registered above the 50.0 no-change mark at 50.8 in December, up from 50.0 in November, to signal the first improvement in the health of the ASEAN manufacturing sector since February. That said, the index was indicative of only mild growth.
At the country level, Singapore saw the fastest improvement in manufacturing conditions, with the headline figure (55.0) the highest for seven years. Growth was also sustained in Indonesia and Thailand, although the rate of expansion was sharper in the former, with the headline index posting 51.3, compared to Thailand's 50.8. Vietnam was the only other monitored nation to record an improvement in the health of the manufacturing
sector in December. The headline index (51.7) signalled a modest upturn following a broad stagnation in the previous survey period.
At the same time, the Philippines registered a third successive monthly deterioration in conditions. The headline figure (49.2) was indicative of a mild downturn, as was that recorded for Malaysia (49.1). Finally, Myanmar again saw a softer rate of contraction in December, following the unprecedented downturn in October. At 44.7, however, the PMI still signalled a sharp deterioration in the health of the manufacturing sector overall.
"Latest PMI data pointed to some positive news with regards to the ASEAN manufacturing sector in the closing month of 2020," said IHS Markit Lewis Cooper in a press release on Tuesday.
Amid improved client demand and a further increase in factory production, firms remained optimistic with regards to output over the next 12 months.
The level of positive sentiment climbed to the highest since January, although it remained subdued in the context of the series history.