Southeast Asia’s manufacturing sector snapped a three-month slowdown in May, as a surge in domestic demand helped offset a downturn in exports, according to Bloomberg.

The region’s manufacturing purchasing managers’ index rose to 51.5 in May from 50.7 in April, climbing further above the 50-threshold that separates expansion and contraction. Factories saw a solid increase in new orders, allowing them to ramp up production, S&P Global reported on Tuesday.

Vietnam led the region with a reading of 52.8, followed closely by Thailand at 52.6. The Philippines and Indonesia were also in expansion territory last month, while Myanmar and Malaysia both saw negative readings at 49.3 and 49.9, respectively.

While purchasing activity had increased, firms remained cautious about expanding employment, with a slight decline in jobs in May, says S&P Global Market Intelligence economist Maryam Baluch.

“Ongoing trade disruptions and inflationary pressures, driven by the current war, will continue to act as headwinds to growth,” Baluch added.