KUALA LUMPUR, Dec 4 — The manufacturing sector provided further signs of Malaysia’s economic recovery, registering an expansion rate last month that was not seen since 2014.
According to Nikkei Malaysia’s monthly Purchasing Managers Index (PMI), Malaysian factories recorded a score of 52.0 in November, up from 48.6 in the month before; the rate was the highest recorded since April 2014.
The index considers any score above 50 to be an improvement, while those below signify a contraction. Malaysia’s score was also the second-highest in the Asean region.
“The overall upturn reflected accelerated growth in both output and new orders, supported by improvements in domestic and overseas demand conditions.
“In response to greater inflows of new business, firms raised their payroll numbers at the joint-strongest pace since December 2012,” Nikkei Malaysia said in its report.
November was also the first time Malaysia has climbed above 50 in the PMI this quarter, with Nikkei Malaysia saying that factories were also receiving fresh orders at a rate not seen since 2014.
Backed by stronger foreign demand, the manufacturing sector also reported that export orders in November grew at the second-fastest rate since Nikkei Malaysia began the PMI in 2012.
“The degree of business confidence towards the 12-month outlook for output was the strongest in nearly four years. Positive projections for stronger demand conditions and new projects were cited as the key factors behind positive sentiment,” the firm added.
The news follows Malaysia’s sterling performance in the third quarter, when the country beat forecasts to register a gross domestic product (GDP) growth of 6.3 per cent, prompting Bank Negara Malaysia to raise its full-year projection to between 5.2 and 5.7 per cent.
The ringgit is also recovering on the back of improving oil prices, and is hovering at the 4.09 mark against the US dollar.
Elsewhere in the region, factories in the Philippines were also enjoying a boom, with a score of 54.8 in the Asean-level PMI. Myanmar was third with 51.6.
“Meanwhile, Indonesia’s manufacturing industry recorded another marginal upturn, albeit one that was stronger than in the previous month. Thailand reported stable operating conditions in November after a slight deterioration in October,” Nikkei Malaysia said.
Of the countries rated, only Singapore’s manufacturing remains in contraction, scoring 47.4 on the index.