3-7-2023 (KUALA LUMPUR) The Purchasing Managers’ Index (PMI) for Malaysia’s manufacturing sector dropped slightly from 47.8 in May to 47.7 in June, marking the tenth consecutive month of moderation in operating conditions. This decline represents the strongest moderation observed since January, as reported by S&P Global Market Intelligence on Monday.
S&P Global Market Intelligence, a renowned global financial analytics firm, stated that the latest PMI reading indicates a further slowdown in the Malaysian manufacturing sector. This suggests that the weak trends observed in official data for manufacturing production and gross domestic product (GDP) have persisted throughout the second quarter of the year.
The PMI also revealed a reduction in output levels, attributed to a more significant moderation in new orders. Additionally, input prices experienced the fastest rise in four months, while business confidence reached its lowest point since July 2021.
Usamah Bhatti, an economist at S&P Global Market Intelligence, commented on the situation, stating that there were clear indications in June that business conditions in the Malaysian manufacturing sector remained subdued, thereby hampering production and demand. Bhatti further highlighted that although an improved supply chain environment continues to support operations, inflationary pressures are on the rise. The average cost burdens have accelerated for the third consecutive month.
“Nevertheless, due to muted demand conditions, manufacturers’ confidence has been weighed down, resulting in an overall decline in optimism to a 23-month low. Concerns regarding the timing of a demand recovery and the duration of the current downturn are contributing to this sentiment,” added Bhatti.
