PETALING JAYA: There were some tentative signs of improvement in the Malaysian manufacturing sector, resulting in less pronounced slowdowns in new orders output and employment while business confidence reached a seven-month high, said S&P Global.
It said the inflation rates of both input costs and output prices ticked higher, often due to the weakness of the ringgit against the US dollar, but they remained relatively muted.
In a statement today, S&P Global Market Intelligence economic director Andrew Harker said the latest Purchasing Managers’ Index (PMI) data provided tentative signs that the sector may be turning a corner, although Malaysian manufacturers remained under pressure in November.
He hoped this improvement seen in November would continue in the year ahead, supporting optimism in the 12-month outlook for manufacturing production.
“Sentiment strengthened slightly to the highest since April,” he said in a statement today.
Harker said that the new orders moderated to a lesser extent, and this fed through to softer slowdowns in output, purchasing, and employment, the latter of which was close to stabilisation during the month.
He pointed out that business confidence also picked up, suggesting that these nascent improvements have the potential to be sustained into 2024.
The seasonally adjusted S&P Global Malaysia Manufacturing PMI rose to a seven-month high of 47.9 in November, up from 46.8 in October, signalling a muted moderation in the sector’s health.
S&P Global said the historical relationship between the PMI and official gross domestic product data indicates that the final quarter of 2023 would see continued growth, with the magnitude of the expansion likely to be similar to the 3.3% year-on-year increase posted in the third quarter.
Meanwhile, it said employment neared stabilisation, easing to the joint-softest degree in the current seven-month reduction sequence.
“Where staffing levels moderated, firms often linked this to resignations.
“Manufacturers were again able to reduce their backlogs of work given the muted demand environment, but the rate of depletion was much weaker than the series record posted in October,” it said.
S&P Global added that the purchasing activity, stocks of inputs, and inventories of finished goods were also scaled back again in November, but in each case to a lesser extent than in the previous survey period.