1-6-2023 (KUALA LUMPUR) The seasonally adjusted S&P Global Malaysia Manufacturing Purchasing Managers’ Index (PMI) dropped to 47.8 in May, down from 48.8 in April, according to S&P Global Market Intelligence. The latest reading indicates that businesses in the manufacturing sector are facing increasing challenges, with business conditions moderating to the greatest extent since January, as stated by the global research house.
The data for the second quarter so far suggests that Malaysia’s gross domestic product (GDP) growth will remain steady at around 5.5 percent year-on-year, similar to the growth recorded in the first quarter. However, the latest figures align with official manufacturing data, which indicate a near-stagnation in year-on-year growth.
Andrew Harker, the Economics Director at S&P Global Market Intelligence, commented on the challenging situation faced by Malaysian manufacturers, highlighting widespread reports of weak demand in the latest PMI survey. Although the figures still show growth according to official data, Harker noted that the sector seems to be going through a soft patch that may persist for several months.
Consequently, businesses are adopting a cautious approach and reducing spending by limiting input purchases and scaling back employment. Harker also noted the emergence of spare capacity, particularly in supply chains, where delivery times improved to the greatest extent in over a decade in May.
