KUALA LUMPUR: The seasonally adjusted S&P Global Malaysia manufacturing purchasing manager’s index (PMI) inched up to 48.8 in May, compared to 48.6 in April, signalling a sustained, though softer moderation in operating conditions.
S&P Global Market Intelligence economist Usamah Bhatti said PMI data for May revealed that business conditions in the Malaysian manufacturing sector were muted as production levels were scaled back due to subdued new orders.
"That said, the rates of reduction in both measures eased to three-month lows and were only marginal overall.
"As such, the data indicated that gross domestic product (GDP) growth is likely to have sustained at a similar pace as seen in the opening quarter of the year,” he said in a statement today.
He noted that manufacturing firms also reported a gradual increase in cost burdens, with average input costs rising at the sharpest rate in six months.
Citing the survey evidence, he said the impact of unfavourable currency movements and US tariffs on raw material prices had pushed expenses higher, especially from abroad.
"Sentiment stayed positive meanwhile, with firms expecting higher output in the coming year.
"The degree of confidence receded from April to the lowest since mid-2021 amid concern regarding US trade policy and a lack of suitable workers, he said.
Meanwhile, S&P Global also said Malaysian manufacturers reported that employment levels were unchanged midway through the second quarter, thereby ending a seven-month sequence of job shedding.
Hence, it said the muted new order inflows enabled firms to continue working through outstanding business, and the level of backlogs was marginally lower in the latest survey month. - Bernama
