Chart of the day: Manufacturing momentum slows in May

Cooling global trade demand and higher supply costs are the cause of the slowdown.

This chart from RHB shows the year-to-date growth in key manufacturing clusters with manufacturing momentum having slowed considerably, with industrial production merely rising by 0.7% in May MoM in the three months moving average (3MMA) compared to 2.6% in April MoM (3MMA). This is three times slower, RHB said.

The drivers behind the slowdown were identified as the cooling global trade demand and higher supply costs, and these could persist into the year ahead. 

“As cited in our latest NODX report, we identified three key risks that may shape the course. These include trade headwinds led by the Russia-Ukraine tensions, higher inflation dynamics seen year-to-date, and external uncertainties surrounding COVID-19 across the globe and the exacerbation of global supply chain disruptions,” RHB said.

Despite that, more than 50% of the manufacturing clusters grew, with the electronics cluster leading the way.