KUALA LUMPUR, Aug 1 — Manufacturing output rose in July for the first time in five months, signaling a stabilisation of the sector that encouraged firms to increase recruitment, according to Nikkei Malaysia.
In its monthly Purchasing Manager Index (PMI), Malaysia recorded 49.7 for July or just a hair under the score that would indicate growth in the sector.
A PMI score of below 50 denotes contraction while a score of above 50 signals expansion.
“The abolition of the Goods and Service Tax in June continued to feed into PMI price data, as input cost inflation remained modest and broadly similar to June’s multi-year low,” said Aashna Dodhia, Economist at IHS Markit, which compiled the survey.
However, she noted that businesses continued to report lacklustre demand for new orders, although there were indications that the dip in June was consistent with historical performance trends.
Rising costs remained a significant hurdle for the sector, as prices continued to climb in July to make it 42 straight months of uninterrupted input cost increases.
Despite this, the output price index remained neutral, indicating that costs at that end were stable.
Elsewhere in the region, Vietnam recorded a “significant increase” to its PMI, which rose to 54.9. The Philippines booked a score of 50.9 while Indonesia was third at 50.5.
The overall score for the region dipped to 50.1 from 50.5 the previous month, however, suggesting that the growth registered in the first half of the year was abating.
“The latest Nikkei PMI survey signalled a loss of growth momentum in Asean’s manufacturing sector in July,” said Bernard Aw, the principal economist at IHS Markit.
“Moreover, confidence about longer term output deteriorated further, painting a worrying development across the region as we move into the second half of this year.”
