ASEAN Manufacturing Showdown: Malaysia Unrivalled, Indonesia Slips
ASEAN manufacturing activity across several countries began showing signs of weakness in April 2026. Pressure from the war in the Middle East is starting to have a more tangible impact on the industrial sector, particularly through rising costs of raw materials, energy, shipping, and supply chain disruptions.
According to the S&P Global report for the April 2026 period, of the five ASEAN countries that have released their Manufacturing PMI data, only three remain in expansion territory: Malaysia, Myanmar, and Vietnam. Meanwhile, Indonesia and the Philippines have entered contraction territory.
As a note, the Purchasing Managers’ Index (PMI) for manufacturing is an indicator used to assess the condition of industrial activity. A figure above 50 indicates that the manufacturing sector is still expanding, while a figure below 50 shows contraction.
Malaysia Strongest, Production Grows Rapidly
Malaysia emerged as the country with the strongest manufacturing performance in April 2026 among several ASEAN nations whose data has been released. Malaysia’s Manufacturing PMI rose to 51.6 from 50.7 in March.
This increase shows that Malaysia’s manufacturing sector is still able to continue its recovery, even at a stronger pace. Production increased for the second consecutive month and recorded the fastest growth since December 2021.
One factor supporting Malaysia’s performance is stockpiling activity.
Manufacturing companies in Malaysia increased purchases of raw materials and stocks of finished goods to anticipate potential supply disruptions due to the war in the Middle East.
New orders also returned to growth after two months of contraction. This indicates that domestic demand is beginning to improve, although foreign demand remains weak.
However, cost pressures remain a concern. S&P Global noted that the rise in input prices in Malaysia was also influenced by higher raw material costs and supply chain disruptions. In fact, output price inflation reached its highest level in April.
Myanmar, Vietnam, Philippines Losing Momentum
Meanwhile, Myanmar ranked second with a PMI of 50.9, down from 51.5 in the previous month. Although still in expansion territory, Myanmar’s manufacturing improvement is starting to slow.
Myanmar’s manufacturing production fell for the first time in 2026 due to companies facing limitations in raw materials, labour, and fuel.
Vietnam followed with a PMI of 50.5, down from 51.2 in March 2026. Although still holding in expansion territory, Vietnam’s manufacturing activity is also beginning to lose momentum.
Vietnam’s production is still growing, but the pace has slowed to its lowest level in the past ten months.
S&P Global noted that Vietnam’s new orders fell for the first time in eight months, while new export orders declined sharply for the second consecutive month.
On the other hand, the Philippines became the country with the lowest PMI among other ASEAN nations that have released data.
The Philippines’ Manufacturing PMI plunged to 48.3 from 51.3 in the previous month, marking the first contraction since November 2025.
The decline in the Philippines’ manufacturing was mainly triggered by a sharp weakening in new orders in April.
This decline in new orders was the deepest since August 2021.
Export demand also worsened, with new orders from abroad falling at the fastest pace since mid-2020.
Indonesia’s Manufacturing Contracts, Pressured by Costs and Production
Indonesia became one of the ASEAN countries entering contraction territory in April 2026. Indonesia’s Manufacturing PMI fell to 49.1 from 50.1 in March.
This decline marks the first contraction in Indonesia’s manufacturing sector in the last nine months. The condition indicates that pressure on the national industry is becoming heavier at the start of the second quarter of 2026.
S&P Global noted that Indonesia’s manufacturing production fell at the fastest pace since May 2025. This output decline occurred due to weakening new demand and reduced company purchasing activity.
New orders also fell again. Some companies cited the decline in demand as influenced by rising prices and raw material supply disruptions.
The war in the Middle East also became an important factor pressuring Indonesia’s manufacturing. The conflict drove up energy prices, shipping costs, and imported raw material prices. As a result, input costs rose to their highest level since April 2022.
This cost pressure is then starting to be passed on to selling prices. S&P Global noted that Indonesia’s manufacturing output prices rose at the fastest pace in the last 12.5 years.
With this condition, Indonesia’s manufacturing not only faces pressure from the production side but also from the demand side.
Rising prices make companies and consumers more cautious, while geopolitical uncertainty further restrains industrial activity.