Message from Secretary General_November 2021 - ASEAN Q3 2021 Macroeconomics Results

Posted on 10 January 2022

Q3 2021 was the time of the rapid spread of the Delta variant, resulting in peak COVID19 infections across ASEAN-6 countries. Indonesia’s cases exceeded 50,000/day at the peak while Philippines, Malaysia and Thailand exceeded 20,000 infections per day. Vietnam’s cases exceeded 17,000/day, while Singapore exceeded 5,000/day. It is no surprise that most countries re-introduce more restrictions, which impact their economies once again.

ASEAN-6 GDP in Q3 2021

While Q2 marked an economic expansion in all ASEAN-6 countries, Q3 was a different story altogether.

Indonesia’s GDP expanded 3.1% in Q3 2021 slower than 7.1% in Q2, due to new restrictions to control more outbreaks. Household consumption
was affected. GDP growth was contributed mainly by exports. Malaysia’s GDP took a turn to contracted at 4.5% in Q3 2021, in line with a 2-month long COVID-19 containment measures. All economic sectors were affected.

Philippines’ GDP grew at a better than expected 7.1% in Q3 2021, contributed by wholesale and retail trade; repair of motor vehicles & motorcycles (6.4%), manufacturing (6.3%) and Construction (16.8%). Growth was slower compared to Q2 2021 mainly due to the reimposition of restriction in Metro Manila and other major urban centres and impact of the typhoon season.The Singapore economy expanded 7.1% in Q3 2021, slower than the receding quarter mainly because the lower base in Q2 2020 gave Q2 2021 a big expansion figure. The top 3 contributors to the quarter growth were the manufacturing, finance & insurance, construction sectors. In Thailand, GDP contracted slightly at -0.3% in Q3 2021, a reversal from a previous positive quarter growth, mainly due to and severe COVID19 outbreak and curbs.

Vietnam’s GDP in Q3 2021 was estimated to fall by 6.3%, the deepest contraction since COVID19 outbreak in early 2020. Effort to curb the Delta variant especially in major cities (Hanoi, Ho Chi Minh and Danang) as well as industrial areas south of Ho Chi Minh City have affected the economy badly.


ASEAN-6 Construction Sectors

Q3 2021 construction sector also expanded across ASEAN-6 countries, partly due to a low base in Q2 2020 and due to the restarting of public construction works. 

The Indonesian construction sector expanded 3.8% in Q3 2021, continuing the expansion of 4.4% in Q2 2021, as the country did not close the construction sector, even during the pandemic.

The Malaysian construction sector contracted 20.6% in Q3 2021, mainly led by reduced activities in the civil engineering (-36.1%), residential (-27.3%) and non-residential (-13.3%) sub sectors. This is due to constraints on operating capacity due to COVID19 restrictions and labour shortage.

The Philippine construction sector continued to expand at 16.8% in Q3 2021, supported by continuing growth of investments in the sector
by 23.8% in Q3 2021 preceded by 35.1% y-o-y growth in Q2 2021.

In Singapore, the construction sector grew 66% y-o-y in the Q3 2021, due to expansion in both public and private sectors. The strong growth was mainly due to the low base effects given the slow resumption of construction activities after COVID19 restrictions in Q3 2020.

The Thailand construction sector declined 4.1%, in Q3 2021 compared to a growth of 3.9% in Q2 2021. All private construction sub sectors declined, except for private industrial plants. Public construction also contracted due to low disbursement from the Authorities. However, state enterprise construction continued to expand due to existing projects.

In Vietnam, the construction sector fell 11.4% in Q3 2021, as COVID19 curbs disrupted construction projects and related services.

 

ASEAN-6 Manufacturing Activities

Indonesia, Philippines and Singapore manufacturing sectors continued to expanded in Q3 2021 while, Malaysia, Thailand and Vietnam manufacturing activities declined.

The Indonesian manufacturing sector expanded 3.7% in Q3 2021, led by the growth in food & beverage (3.5%), pharmaceuticals (9.7%), base metals (9.5%); these are possible because Indonesia did not completely shut down the economy, while social distancing rules do apply.

In Malaysia, the manufacturing sector declined 0.8%, due to restrictions on non-essential manufacturing activities. Growth was in the food processing, refined petroleum, chemical processing / pharmaceuticals, computer, electrical & electronics sub sectors. Basic metals industry contracted 13.1%, while fabricated metals industry contracted 8.8%. Similarly, the auto industry also contracted 30.6%.

In Philippines, the manufacturing sector grew 6.3% in Q3 2021, led mainly by computer and electronics (14.3%), chemicals (7.3%), non-metal minerals (18.1%), basic metals (18.3%).

The manufacturing sector in Singapore expanded 7.2% in Q3 2021, slower than the 18% growth in Q2 2021. Growth came from expansions in all manufacturing clusters, except for biomedical (-4.3%). Growth was in the precision engineering (24%) and transport engineering (22%) clusters
recorded the largest increases in output.

The Thailand manufacturing sector declined by 1.4% in Q3 2021, a reversal from a 16.9% growth in Q2 2021. The petroleum, non-metal minerals and fabricated metals, electrical and transport equipment sub sectors declined, while computers, basic metals, machinery and equipment and motor vehicle, paper, chemicals, rubber and plastic productions all slowed down. Only the pharmaceutical subsector expanded.

The manufacturing sector in Vietnam declined 3.2% in Q3 2021, as the outbreak reduced manufacturing activities amid social distancing restrictions over extended periods of time.

With Delta variant being under better control and a higher rate of vaccination, Q4 2021 is expected to be better, and ASEAN-6 countries are cautiously opening up the borders to travel, albeit cautiously.

REFERENCE TABLES
Legend

Table 1: GDP Growth in ASEAN-6 Countries (%)

Table 2: Construction Growth in ASEAN-6 Countries (%)

Table 3: Manufacturing Growth in ASEAN-6 Countries (%)

Table 4: Forecasts for ASEAN-6 Countries

Source : SEAISI