Malaysia’s manufacturing sector returns to expansion
KUALA LUMPUR: Operating conditions across the Asean manufacturing sector improved solidly in April, with Malaysian manufacturers signalling a return to expansion territory as new order growth hits eight-year high.
According to S&P Global Malaysia Manufacturing Purchasing Managers’ Index (PMI) released today, the local manufacturing sector recorded a renewed increase in growth momentum at the start of the second quarter of 2022.
Although output levels remained subdued, incoming orders recovered strongly to register the sharpest rise since April 2014 amid improved client confidence, it said.
The seasonally adjusted S&P Global Malaysia Manufacturing PMI rose to 51.6 in April from 49.6 in March, indicating a renewed improvement in the health of the sector.
“The uptick in the headline figure was led by a sharp recovery in new order volumes, with growth of new business hitting an eight-year high.
“Firms noted that stronger client confidence had boosted demand in both domestic and external markets,” it said.
S&P Global said that concurrently, new export sales returned to expansion territory for the second time in three months albeit only marginally.
It said April data suggested that output was scaled back for the fourth month running, therefore the rate of moderation softened from March and was only mild.
Firms commonly attributed muted production to difficulty in sourcing and receiving inputs amid material shortages and delivery delays, it said.
“Despite the rise in demand, manufacturers continued to scale down workforce numbers as international border restrictions hampered the ability of firms to hire from abroad.
As a result, the rate of job losses quickened,” it said.
S&P Global said businesses also noted concern that sustained price and supply pressures had hampered operations, with material shortages and delivery delays widespread.
This played on firms’ expectations regarding future output which fell to the lowest since last August, it added.
Regionally, S&P Global said manufacturers in Singapore signalled a sharp upturn in operating conditions during April, with the headline PMI rising to 58.1.
Meanwhile, Indonesia and Thailand both signalled modest upturns in the health of their respective manufacturing sectors, with both nations’ PMIs registering 51.9.
while Vietnam’s headline PMI was unchanged at 51.7, indicating a moderate overall improvement in the health of the sector, it said.