(Bloomberg) -- Vietnam’s factory activity slipped into contractionary territory for the first time in five months after Typhoon Yagi triggered widespread disruptions, while Taiwan and Thailand cooled, purchasing managers’ indexes published by S&P Global showed.
PMI for export hub Vietnam slipped to 47.3 in September from 52.4 in the prior month. Output, new orders, purchasing and stocks of inputs all declined, according to S&P’s report released Tuesday. But Vietnam’s subdued performance is only likely to be blip.
“The severity of Typhoon Yagi had a major impact,” said Andrew Harker, economics director at S&P Global Market Intelligence. “The underlying demand picture should remain conducive to growth, however, meaning that we could see a quick rebound in the sector as the recovery from the storm begins.”
Taiwan’s gauge eased to 50.8 in September from 51.5 the prior month for its slowest growth since April, reflecting weakness in both output and new orders. S&P pointed to geopolitical and macroeconomic uncertainties with firms in Taiwan taking a “more circumspect approach” to decision-making.
Thailand lost momentum too with its reading down to 50.4 from August’s 52.0 while Japan’s PMI deteriorated for a third straight month to 49.7, reflecting a renewed fall in production levels and new orders.
The results come after several months of solid momentum in Asia that had been achieved despite a patchy recovery in China. The world’s second-largest economy has since unleashed a barrage of monetary, fiscal and regulatory easing to try to boost its ailing property market.
But China’s own purchasing managers indexes underscored the challenge for its authorities, with the official manufacturing PMI remaining in contraction territory for a fifth month.
For the ASEAN region as a whole, output contracted in September due to cooling underlying demand, said Maryam Baluch, S&P Global economist.
“On a positive note, inflationary pressures continued to ease in September. The subdued price environment may prompt other ASEAN economies to consider loosening their monetary policy, similar to the Philippines, particularly in light of slowing output growth.”
The Philippines manufacturing sector was a rare bright spot, rising to 53.7 to mark its best reading since mid-2022, S&P said.
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