Nikkei: Headline PMI climbs to highest since September 2018

The headline Nikkei Malaysia Purchasing Managers’ Index (PMI) has risen to a seven-month high in April, the highest since September 2018 amid growth for export orders.

Nikkei said the upward trend in April was the highest since September 2018, recording 49.4 compared to 47.2 in March to return to its long-run average.

“The rise in PMI is broadly indicative of gross domestic product growth accelerating to just over five per cent according to historical comparisons,” it said in a statement yesterday.

It added that the key to the upturn in the PMI was a renewed improvement in foreign demand in April, which had weakened business trends in prior months.

“New export orders rose for the first time in five months. Higher workloads from overseas sources were attributed to business wins in Europe, the US and countries in Asia such as Singapore and Japan,” it said.

Nikkei also said that the increase in export sales has helped to drive the overall new orders index up by some 3.6 points to its highest since last September, its largest rise for ten months.

“Pressure on manufacturers to ease back on capacity expansion likewise moderated, with the output index jumping 1.9 points (its largest rise for almost oneand-a-half years), reaching its highest since last October,” it said.

In line with the more positive outlook, Nikkei said manufacturers stepped up their hiring, with employment increasing in April at the fastest pace in seven months, where the investment into new machinery and plant expansions reportedly prompted greater recruitment.

“In a month in which oil prices continued to rise, producers reported the first increase in average input costs so far this year. Average selling prices nudged higher as a result, albeit with both gauges of price pressures remaining relatively subdued as sluggish global demand for many commodities continued to help reduce inflationary pressures.

“Suppliers’ delivery times has also improved for second successive month, underscoring the weakness of demand relative to supply which has dented pricing power,” it said.