ASEAN manufacturing activity across countries remained in the\nexpansion zone in March 2026. However, the pace is beginning to slow\namid increasing price pressures and supply chain disruptions caused by\nthe war in the Middle East.<\/p>\n
According to the S&P Global report for the March 2026 period, the\nASEAN Manufacturing PMI fell to 51.8 from 53.8 in February.<\/p>\n
Although still above the 50 level indicating expansion, this figure\nmarks the lowest in the past six months. S&P also noted that growth\nin output and new orders continued, but at a slower pace. Meanwhile,\nprice pressures surged to the highest level since October 2022.<\/p>\n
As a note, the manufacturing PMI is an indicator used to assess\nindustrial activity conditions. Generally, a figure above 50 indicates\nthat the manufacturing sector is developing or expanding, while below 50\nmeans it is experiencing contraction.<\/p>\n
Maryam Baluch, Economist at S&P Global Market Intelligence, said\nearly signs of the impact of the Middle East war are starting to appear\nin various ASEAN countries. The effects are felt in demand, production,\nand business confidence. However, the most visible pressure comes from\nrising prices.<\/p>\n
Thailand Remains the Strongest, Other Countries Start Losing\nMomentum<\/p>\n
Among ASEAN countries, Thailand still records the strongest\nmanufacturing activity. The White Elephant\u2019s Manufacturing PMI rose to\n54.1 in March from 53.5 in the previous month.<\/p>\n
This increase was supported by faster growth in new orders and fairly\nstrong production growth. Nevertheless, business confidence in Thailand\nexperienced a sharp decline to the lowest level in four and a half years\ndue to fears of the Middle East war\u2019s impact.<\/p>\n
In addition, Myanmar also continues to record expansion with a PMI of\n51.5, unchanged from the previous month.<\/p>\n
Meanwhile, the Philippines and Vietnam remain in the expansion zone,\nbut both show quite sharp slowdowns. The Philippines\u2019 manufacturing PMI\nfell to 51.3 in March from 54.6 in February. This slowdown was triggered\nby weakening customers, weakening export orders, as well as rising\nenergy and raw material costs.<\/p>\n
S&P assesses that the Middle East war is beginning to pressure\ndemand and reduce the industrial cost burden in the Philippines.<\/p>\n
Vietnam recorded a PMI of 51.2, down from 54.3 in February. Although\nstill expanding, its growth pace became the weakest since September last\nyear.<\/p>\n
The main pressure comes from input price provisions, particularly due\nto rising transportation, fuel, and transport costs. Even the selling\nprices of Vietnam\u2019s manufactured products rose at the fastest pace in\nnearly 15 years.<\/p>\n
On the other hand, Malaysia managed to return to the expansion zone.\nMalaysia\u2019s manufacturing PMI rose to 50.7 in March from 49.3 in\nFebruary. This improvement was driven by output recovery and employment\nadditions.<\/p>\n
However, demand conditions remain weak as new orders declined again,\nwhile price pressures and supply disruptions began to increase due to\nthe US-Iran war.<\/p>\n
Indonesia\u2019s PMI Lowest in ASEAN<\/p>\n
For Indonesia, manufacturing activity remains in the expansion zone\nbut nearly stagnant. Indonesia\u2019s Manufacturing PMI dropped sharply to\n50.1 in March 2026 from 53.8 in February.<\/p>\n
This achievement shows that the national industry is still growing,\nbut very thinly and much weaker than the previous month. In fact, this\nfigure became the lowest since July 2025 or in the past eight\nmonths.<\/p>\n
Compared to other ASEAN countries, Indonesia\u2019s position is the\nlowest. Indonesia is below Thailand, Myanmar, the Philippines, Vietnam,\nand Malaysia. This means that, although not yet entering contraction\nterritory, the pressure on Indonesia\u2019s manufacturing sector appears\ngreater than that of several neighbouring countries.<\/p>\n
S&P Global noted that in March, there was a renewed decline in\noutput and new orders in Indonesia. Production fell after previously\ngrowing for four consecutive months. New orders also weakened again for\nthe first time in eight months.<\/p>\n
Several companies mentioned supply disruptions of raw materials and\nrising material prices, partly triggered by the Middle East war, which\npressured demand and production.<\/p>\n
Usamah Bhatti, Economist at S&P Global Market Intelligence, said\nthe weakening of Indonesia\u2019s manufacturing in the end of Q1-2026 was\nmainly triggered by the outbreak of the Middle East war. According to\nhim, the war exerts significant pressure on prices and raw material\nsupplies, thereby disrupting production as well as demand.<\/p>\n
He also assessed that March\u2019s data shows Indonesia\u2019s manufacturing\nsector is quite vulnerable to shocks from price and supply sides.<\/p>", "url": "https:\/\/jawawa.id\/newsitem\/asean-manufacturing-strength-competition-indonesia-lowest-overtaken-by-malaysia-1775109051", "image": "" }, "sponsor": "Okusi Associates", "sponsor_url": "https:\/\/okusiassociates.com" }