Nikkei Malaysia manufacturing PMI higher in January

Manufacturing sector output increased by 4.4% in December 2018 after expanding by 3.7% in November 2018.

KUALA LUMPUR: The headline Nikkei Malaysia Manufacturing Purchasing Managers' Index (PMI) rose to 50.5 in January 2018 from 49.9 in December, with a marginal improvement in operating conditions across the country's manufacturing sector.  

The Nikkei Malaysia Manufacturing PMI, a composite single-figure indicator of manufacturing performance indicated that the health of the sector had strengthened in two of the past three months.

“The improvement was recorded despite a broad stagnation in output, following increases in each of the previous five months.

“Malaysia's goods-producing sector recorded a renewed increase in new business at the start of the first quarter,” said IHS Markit, a financial information services provider.

IHS Markit Economist, Aashna Dodhia, said the recent steady run of output growth lost some steam in January, but the manufacturing PMI data signalled a return to expansion of new orders.

“This, alongside rising employment and buoyant sentiment, suggests that output could regain momentum as the year progresses,” she added.

According to IHS Markit, firms reduced their pre-production inventories in January, but at a marginal pace.

“Stocks of finished goods also fell, the first time in three months in which this has been the case,” it said.

The data also showed that the level of positive sentiment towards the 12-month outlook for output was the joint-strongest since December 2013.

Expectations of an improvement in demand conditions and company expansion plans were the key factors behind business confidence, according to anecdotal evidence, IHS Markit said. - Bernama