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Malaysia PMI November 2020

Malaysia: Manufacturing PMI drops slightly in November

The manufacturing Purchasing Managers’ Index (PMI), produced by IHS Markit, inched down to 48.4 in November from 48.5 in October, marking the lowest reading since May. As a result, the index dropped further below the 50-threshold that separates improving from deteriorating conditions in the manufacturing sector, suggesting that the recovery is losing steam.

November’s slide was largely attributed to moderating growth in both new orders and output as rising Covid-19 infections and the reintroduction of associated restrictions home and abroad weighed on demand. Nonetheless, although job shedding continued in November, it did so at the softest pace since May. Moreover, firms’ sentiment regarding the 12-month outlook strengthened amid expectations of higher production once the pandemic comes to an end. On the price front, input cost inflation rose again in November, amid ongoing raw material shortages, prompting firms to increase their selling prices further.

Commenting on November’s downturn, Chris Williamson, chief business economist at IHS Markit, said:

“Manufacturers continue to battle against COVID-19 headwinds, with renewed restrictions dampening domestic activity while lockdowns in other countries have limited export growth as well as caused further delays in the supply of materials. Crucially, however, the impact is far less severe than seen earlier in the year, suggesting the hit to fourth quarter GDP will be much less marked than we saw in the second quarter.”

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