ASIA: ASEAN Manufacturing PMI Stays Above 50 Due To Indonesia
Manufacturing activity posted more moderate growth in March with the S&P Global PMI falling to 50.8, still above January and Q4 average, from 51.5. Growth was driven by Indonesia and Vietnam as they were the only two to record PMIs above the breakeven-50 level. Output and new orders continue to grow but March saw a slower pace and there was some moderate job shedding. However, businesses remain positive regarding the outlook and expect output to rise over the year.
- The Q1 average of the ASEAN manufacturing PMI was slightly higher than Q4, signalling that growth was in line or possibly moderately higher in the sector at the start of 2025. The index has been positive since December 2023.
- Capacity pressures persisted in the region and while cost inflation remains high it eased last month to its slowest since July 2023. Soft demand means that firms continue to struggle to pass on higher costs with selling price inflation moderating further.
- After seeing a contraction in industrial growth in H2 2024, Indonesia has seen positive growth since December although it moderated in March with the PMI down to 52.4 from 53.6. Apart from February, this was the highest since April 2024. Confidence in the outlook remains close to a 3-year high and at this stage seems little affected by US trade threats. Expected growth over the year was steady.
- Manufacturing output and orders growth remain positive with new foreign orders rising in March. Solid demand growth has resulted in an increase in purchasing and order backlogs but also moderate hiring.
- Both cost and output inflation are below the series average. Costs continue to be driven by the weaker rupiah and higher commodity prices.
ASEAN S&P Global manufacturing PMIs sa
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ASIA: Vietnam PMI up Marginally in February.
- Vietnam’s February Manufacturing PMI rose to +49.2 from 48.9 in January.
- Output was down at +48.9 from +49 in the month prior with new orders falling.
- This was the third month consecutively that PMI Manufacturing has contracted with new orders the lowest reading since third quarter 2024.
MNI: AUSTRALIA Q4 BIZ INDICATORS INVENTORIES +0.1%
- MNI: AUSTRALIA Q4 BIZ INDICATORS INVENTORIES +0.1%
- AUSTRALIA Q4 BIZ INDICATORS GROSS OP PROFITS +5.9%
LNG: Gas Prices Lower Heading Towards Spring
Natural gas prices were lower on Friday. European gas fell 1.9% to EUR 44.30 to be down 16.6% in February as hopes rose of more flexible EU refilling regulations ahead of next winter and the weather warmed. There were also nascent hopes of a peace deal for Ukraine that would allow Russian gas flows through Ukraine again. Prices troughed late in February at EUR 41.09.
- The argument between the White House and President Zelensky makes a peace deal for Ukraine less likely, but the meeting between the latter and the EU appears to have been tentatively more promising with plans to increase Ukraine’s defences and for a month-long ceasefire at sea and in the air. UK PM Starmer has said he will discuss the results with US President Trump. Zelensky has also said he’s prepared to sign the natural resources deal with the US, which includes energy.
- US gas fell 2.9% to $3.82 on Friday but was still over 24% higher last month. It reached a peak of $4.35 on February 20 and trended lower to month end. Prices had been supported by increased heating demand from a cold snap but the forecast for much of the US is showing above-average temperatures in the second week of March, while the West Coast is likely to see cooler weather, according to Maxar.
- US lower-48 gas production rose 2.9% y/y on Friday while demand fell 10.7% y/y.
- North Asian gas demand has been robust due to colder weather after a mild start to the heating season.
