Malaysia: Manufacturing PMI edges up in July, but remains deeply entrenched in negative terrain
August 2, 2021
The manufacturing Purchasing Managers’ Index (PMI), produced by IHS Markit, came in at 40.1 in July, marginally above June’s 39.9. That said the index, the index remained well below the 50-threshold that separates deteriorating from improving conditions in the manufacturing sector, compared to the previous month.
July’s reading largely reflected further a notable decline in new orders, amid a rise in new Covid-19 infections and the reinstatement of tougher curbs. Against this backdrop, output slid at the sharpest rate since April 2020, while a markedly milder decline in new export orders, amid strengthening demand from the U.S. and Europe, likely cushioned the fall. On a brighter note, employment levels were broadly unchanged, putting an end to a three-month streak of job shedding, while manufacturers remained optimistic with regards to output in the 12 coming months.
On the price front, persisting material shortages and higher delivery costs exerted upward pressure to prices, with input cost inflation accelerating for the 14th successive month. As a result, firms tried to pass on costs to consumers, albeit only partially.
Author: Alexandros Petropoulos,