Thailand
Malaysia’s PMI reading hits highest four months
KUALA LUMPUR: The seasonally adjusted S&P Global Malaysia Manufacturing Purchasing Managers’ Index (PMI) rose to 48.4 in February from 46.5 in January, and posting its highest reading in four months.
The index has now, however, pointed to six consecutive months of challenging business conditions, according to S&P Global.
In a statement, S&P Global Market Intelligence economic director Andrew Harker said there were reasons for optimism provided by the latest PMI survey for Malaysia, with signs that the recent soft patch may be coming to an end.
“Both output and new orders moderated to much lesser degrees than was the case in January, with firms looking to maintain their purchasing activity and workforce numbers.
“Operations are being helped by an improving supply-chain environment, with suppliers’ delivery times quickening to the greatest degree in almost a decade as some of the difficulties of the past couple of years subside. With inflationary pressures also muted, we will hopefully see further improvements in demand and production in the months ahead,” he said.
S&P Global said the relative improvement in the data from the January survey suggests that official numbers for GDP and manufacturing production will continue to show year-on-year expansions, following slowdowns in the rates of growth shown by recent official data releases.
“Signs of improvement in sector performance were evident with regards to both output and new orders in February, which both moderated to a much lesser extent than in January,” it said.
It noted that while firms reported that customer demand remained subdued, total new orders eased to the least extent in four months.
New export orders, meanwhile, continued to slow amid fragile international demand.
S&P Global said there were widespread reports of manufacturers wanting
to clear backlogs of work in February. These efforts were generally successful as outstanding business decreased to the largest extent since July 2017.
Contracts were often fulfilled thanks to the use of stocks of finished goods, which were depleted for the eighth month running, and at the joint-sharpest pace since March last year.
“As part of efforts to keep on top of workloads and get ahead of predicted future price increases, manufacturers posted a near-stabilisation in purchasing activity during February, a marked turnaround from the decline posted in January. The recent run of lower purchasing meant that stocks of inputs continued to moderate, however,” it said.
Firms also looked to maintain their staffing levels, posting broadly no change in the latest survey period following a slight increase in the previous month.
“While the rate of input cost inflation ticked up to a three-month high in February, the latest increase was still relatively modest and much softer than seen on average during 2022. Those respondents that posted a rise in input prices generally linked this to higher raw material costs, but there were also some mentions of packaging prices having increased. Similarly, output price inflation was marginal for the second month running,” it said.
Source: https://www.thestar.com.my/business/business-news/2023/03/01/malaysias-pmi-reading-hits-highest-four-months