Malaysia: Manufacturing PMI rises above neutral threshold in May
The S&P Global Malaysia Manufacturing Purchasing Managers’ Index (PMI) rose to 50.2 in May from 49.0 in April. As a result, the index moved above the 50.0 no-change threshold, and signaled a marginal improvement in manufacturing-sector operating conditions compared to the previous month.
The upturn was primarily driven by a resurgence in new business and production, which saw growth for the first time since July 2022. This positive change was attributed to better underlying demand, leading to a significant rise in export orders from Europe, the Middle East, the U.S. and Asia Pacific. To manage the increased workload, Malaysian manufacturers began hiring additional workers in May, marking the first rise in manufacturing employment since the end of 2023.
On the pricing front, both input and output prices saw an uptick in May. However, the rates of increase remained below their respective series averages. Meanwhile, businesses remained optimisticdue to improved demand conditions, though confidence dipped to a nine-month low. This decline in confidence, coupled with cautious inventory management practices, suggests a cautious outlook among manufacturers despite the positive momentum.