Rise in new or­ders lifts lo­cal pro­duc­tion to 50.7

New Straits Times - - Business -

KUALA LUMPUR: The lo­cal pro­duc­tion out­put rose for the first time in over two years on strong ex­port or­ders.

The head­line Nikkei Malaysia Man­u­fac­tur­ing Pur­chas­ing Man­agers’ In­dex (PMI) im­proved to 50.7 last month from 40.9 in March, sup­ported by mar­ginal rise in new or­ders, said IHS Markit, which com­piled the sur­vey.

Com­pa­nies were buoyed by the stronger num­bers, giv­ing a boost to the growth con­fi­dence for the next 12 months.

The April sur­vey showed that new ex­port or­ders rose at a solid pace and were the strong­est since July 2014.

Growth was un­der­pinned by a solid gain in new ex­port or­ders, as for­eign de­mand for Malaysian goods strength­ened and helped to off­set on­go­ing weak­ness from do­mes­tic-based clients.

China, Europe, Ja­pan and the Mid­dle East were all no­table sources of new sales suc­cess.

“With out­put ris­ing at a slightly faster rate than new busi­ness over the month, man­u­fac­tur­ers were able to make in­roads into their back­logs of work out­stand­ing,” it said in the re­port.

It added that last month’s sur­vey marked the first time that back­logs had fallen this year, with the de­cline the great­est recorded for a year.

Mean­while, there were re­ports that ad­verse cur­rency move­ments had raised the prices of raw ma­te­ri­als.

Av­er­age in­put prices rose sharply last month, with the rate of in­fla­tion re­main­ing his­tor­i­cally high.

The IHS Markit re­port said where pos­si­ble, lo­cal man­u­fac­tur­ers sought to pass on the ris­ing costs to clients through a rise in av­er­age out­put charges.

Paul Smith, se­nior econ­o­mist at IHS Markit, said: “April’s sur­vey marked a some­what pos­i­tive turn­around for the man­u­fac­tur­ing sec­tor, with out­put and new or­ders ris­ing con­cur­rently for the first time in over two years.

“With ex­port growth also pos­si­bly sup­ported by rel­a­tive cur­rency weak­ness, the corol­lary was a fur­ther sharp rise in in­put costs, with firms seek­ing to pass these on wher­ever pos­si­ble to clients.” Rupa Damodaran

PIC BY FAIZ ANUAR

The April sur­vey showed that new ex­port or­ders rose at a solid pace that was the best since July 2014.

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