KUALA LUMPUR, Dec 2 — Malaysia’s manufacturing sector continued to show signs of the goods-producing economy moving along an upward trajectory in November, data and information services company IHS Markit revealed today.
According to latest survey data obtained, IHS Markit said Malaysia’s Manufacturing Purchasing Managers’ Index (PMI) rose for a third successive month to reach a 14-months high.
“The principal driver behind this rise was an increase in new export orders for the first time in four months,” it said in a statement here.
It said the headline PMI — a composite single-figure indicator of manufacturing performance — increased to 49.5 in November, a marginal rise from 49.3 in October, but the highest reading since September 2018 and above its historical average.
“Although below the neutral 50 level, the current PMI reading is broadly indicative of annual GDP growth of over 5 per cent,” it added.
The survey also revealed manufacturing employment levels were held broadly stable in November with business optimism also remaining markedly higher than a year ago.
“While a number of firms reported a loss of headcount via voluntary resignations, this was offset by hiring activity at other companies,” it said.
It also pointed out expectations of stronger demand and successful contract tenders meanwhile underpinned ongoing optimism regarding production in the year ahead at Malaysian goods producers.
IHS Markit chief business economist Chris Williamson said November’s survey brought further signs of manufacturing growth picking up momentum with order books benefiting from renewed export growth fuelled by improving global trade flows and an easing in global trade tensions.
According to IHS Markit, key sources of order book strength were the Middle East and Asia-Pacific regions as well as higher sales to customers in the United States thus generating a net rise in new export orders for the first time in four months.
“The headline PMI, which measures overall business conditions, has now risen for three successive months to reach its highest for over a year, and the survey’s production gauge has continued to rise from the low seen at mid-year.
“Both the headline PMI and the survey’s output gauge are now running at levels indicative of GDP and manufacturing production growing at annual rates above 5 per cent.
“Firms are expecting the improving trend to continue as we head towards the year-end, with the survey’s future output expectations index running well above the lows seen this time last year,” he said.
Williamson said given Malaysia’s export focus, whether these expectations turn into reality will likely depended on the twists and turns in global trade wars.
The survey data also noted little inflationary pressures in the Malaysian manufacturing sector and input prices rose at only a fractional pace in November that was primarily attributed to currency weakness.