KUALA LUMPUR, June 1 — The Malaysian manufacturing sector continued to recover in May as firms reported a second consecutive expansion of new orders but stricter measures to combat a renewed surge in Covid-19 infections had an adverse impact on production volumes, American-British information provider IHS Markit said.

Chief business economist Chris Williamson said May saw a welcome upturn in new orders received by manufacturers and new business has now increased for two consecutive months as global demand continues to revive from the worst of the pandemic.

“However, the recent rise in Covid-19 cases both at home and in many key overseas markets led to further disruptions in May, which dampened production growth and led to further supply chain delays,” he said in a statement today.

Williamson said the Malaysia Manufacturing Purchasing Managers’ Index (PMI) continued to suggest that the second quarter would see the strongest manufacturing upturn, despite the easing of growth in May, but the concern is that the virus could continue to weaken growth in coming months.

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“Future growth expectations took a knock in May as the renewed wave of infections served as a reminder that the virus remains a significant risk to the outlook,” he said.

He said the headline PMI, a composite single-figure indicator of manufacturing performance, eased to 51.3 in May from a record high of 53.9 in April, signalling a further improvement in the health of the sector and the first time back-to-back monthly improvements that have been reported since mid-2018.

He added that the historical relationship between the PMI and official statistics suggested that gross domestic product (GDP) broadly stabilised at the start of the year, supported by improved manufacturing output but the impact of the latest tightening of restrictions is yet to feed through to official statistics although the latest PMI data suggested that the sector has stagnated in May. — Bernama

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