KUALA LUMPUR, Aug 2 — The Purchasing Managers’ Index (PMI) data for July 2022 signalled yet another modest improvement in operating conditions across the Asean manufacturing sector, with PMI reading for Malaysia hitting a three-month high in July.
In its Global Asean Manufacturing PMI report, S&P Global Market Intelligence said Malaysia’s PMI rose to 50.6 in July from 50.4 in June, reflecting a marginal improvement in the sector.
It said output volumes returned to growth territory for the first time in seven months amid the strongest rise in new orders since April, albeit with subdued growth rates.
Chief business economist Chris Williamson said business conditions are improving but remain tough, with firms struggling against headwinds of falling export demand, persistent supply constraints and rising prices.
However, July saw the best expansion in output so far this year, partly reflecting the gradual revival of manufacturing as the worst of the pandemic impact fades, he said.
“Looking at the historical relationship between the PMI and official statistics, the latest reading signalled that industrial production is now increasing gradually after broadly stagnating throughout the first half of 2022, to hint at an encouraging start to economic growth in the third quarter.
“A major uncertainty remains in the path of global demand, as recession risks have intensified in the United States (US) and Europe, which could severely limit any export-derived growth,” he said.
Regionally, the headline PMI in Asean improved slightly to 52.2 in July from 52.0 in June amid stronger expansion in output and new orders.
Singapore led the PMI rankings table in July at 60.0, followed by Thailand (52.4), Vietnam (51.2), the Philippines (50.8) and Myanmar (46.5).
Economist Maryam Baluch said the latest PMI data indicated further growth in the Asean manufacturing sector as improved demand conditions and easing pandemic restrictions boosted production and sales volumes.
She noted that price pressures remain persistently high, ergo central banks around the region are likely to implement tighter monetary policies.
“This could potentially impact growth momentum and demand in the coming months, which continues to find its bearing as the Covid-19 shocks subside,” she said. — Bernama
