KUALA LUMPUR: Malaysia’s headline Manufacturing Purchasing Managers’ Index (PMI) climbed to a 14-month high in November, driven by an increase in new export orders for the first time in four months, according to IHS Markit.
In a statement, IHS Markit said the headline PMI increased to 49.5 in November, a marginal rise from 49.3 in October, but the highest reading since September 2018 and above its historical average.
“Although below the neutral 50 level, the current PMI reading is broadly indicative of annual Gross Domestic Product (GDP) growth of over 5.0%.
“Generating lift in the headline PMI were survey data on order book inflows, with the respective new business index rising for a third straight month to hit a 14-month high,” it said.
According to the survey respondents, demand from several key overseas markets had improved during November, generating a net rise in new export orders for the first time in four months, with key sources of order book strength being the Middle East and Asia-Pacific regions, as well as higher sales to customers in the US.
Meanwhile, Malaysia’s employment levels held steady and the survey’s output index continued to run close to October’s one-year high, while business optimism also remained markedly higher than a year ago.
On the jobs front, manufacturing employment levels held broadly stable in November.
“While a number of firms reported a loss of headcount via voluntary resignations, this was offset by hiring activity at other companies.
“That said, operating capacities were clearly sufficient to deal with existing workloads, as backlog of work declined at a faster rate during the latest survey period,” IHS Markit said.
It said the latest survey data also indicated little inflationary pressures in the Malaysian manufacturing sector.
“Firms are expecting the improving trend to continue as we head towards the year-end, with the survey’s future output expectations index running well above the lows seen this time last year.
“Given Malaysia’s export focus, whether these expectations turn into reality will likely depend on the twists and turns in global trade wars, but at the moment, the news is looking brighter,” the chief business economist at IHS Markit, Chris Williamson said. – Bernama
