Malaysia’s manufacturing PMI rises to 48.1 in September

KUALA LUMPUR: The headline IHS Markit Malaysia manufacturing purchasing managers’ Index (PMI), a composite single-figure indicator of manufacturing performance, rose to 48.1 in September from 43.4 in August, showing downturn in Malaysian manufacturing sector eases in September.

According to an IHS Markit survey on Friday, businesses signaled that the Malaysian manufacturing sector continued to be disrupted by the latest wave of Covid-19 cases in September, albeit to a lesser extent than in August.

“While the latest reading remained below the neutral 50 level to signal a further loss of momentum in the sector, the rate of deterioration eased significantly compared to the prior three months,” it said.

It also said that the historical relationship between the PMI and official statistics suggests the recent downturn in Malaysia’s gross domestic product (GDP) having eased markedly at the end of the third quarter, and the rise in the latest PMI boding well for improving momentum in coming months.

Commenting on the latest survey results, IHS Markit chief business economist Chris Williamson said the uplift in the PMI for September provides a clear signal that the recent easing of pandemic-related restrictions, both domestically and in many key export markets, is helping drive an improvement in the Malaysian economy.

“Vaccination progress has improved and virus cases were on a downward trend through September, helping drive renewed optimism about the economic outlook and driving business confidence to the highest since April,” he said.

According to Williamson, the survey data add to signs that the Malaysian economy has turned a corner at the end of the third quarter following a steep downturn, and the improvements in the survey’s future expectations and order book indicators point to growth picking up in coming months.

“Problems persist, however, most notably in terms of pandemic-related supply chain delays, which are pushing up prices and constraining output in some firms. Thus, while manufacturing looks to be on the road to recovery, that path will by no means be without its challenges,” he said.