KUALA LUMPUR, May 2 — Malaysia’s manufacturing sector recorded a marginal improvement in April for the first time in two years. according to a Nikkei Malaysia report.

Nikkei Malaysia Manufacturing Purchasing Managers’ Index (PMI) posted a score of 50.7 in April, an improvement compared to March’s 49.5. Figures greater than 50.0 show overall improvement of operating conditions in the manufacturing sector.

This indicated the first net improvement in the sector since March 2015.

“April’s survey marked a somewhat positive turnaround with output and new orders rising concurrently for the first time in over two years,” said IHS Markit senior economist Paul Smith in the report today.

He noted that growth was underpinned by improving sales from abroad, which has alleviated ongoing domestic demand weakness.

“With export growth also possibly supported by relative currency weakness, the corollary was a further sharp rise in input costs, with firms seeking to pass these on wherever possible to clients.”

The report also mentioned that new export orders increased at a solid pace, the best since July 2014. China, Europe, Japan and the Middle East were all notable sources of new sales success.

“With output rising at a slightly faster rate than new business over the month, manufacturers were able to make inroads into their backlogs of work outstanding.

“April’s survey marked the first time that backlogs have fallen in 2017 so far, with the decline the greatest recorded for a year.”

The report said there was little need for companies to recruit additional staff and it noted minimal changes in employment numbers in April compared to March.

“A number of firms commented on difficulties and delays in the recruitment of foreign workers.”

The report also noted deteriorating supplier delivery times, with April’s figure showing the greatest lengthening for nearly three and a half years.

“A number of firms commented on difficulties with imported goods clearing Malaysian customs,” said the report.

Nikkei Malaysia also cited reports that adverse currency movement had raised the price of raw materials, adding that the rate of inflation remained historically high.

“Where possible, Malaysian manufacturers sought to pass on their increased costs to clients through a rise in average output charges.”

The index said that a number of companies were buoyed by April’s strengthening of new orders and production, which has helped underpin ongoing confidence that the growth will be sustained over the coming 12 months.