skyline at night in Malaysia

Malaysia PMI December 2019

Malaysia: Manufacturing PMI hits over one-year high in December

The manufacturing Purchasing Managers’ Index (PMI), produced by IHS Markit, rose to 50.0 in December from 49.5 in November. The index thus hit the 50-threshold, signaling operating conditions in the manufacturing sector were broadly stable at the close of the year, after remaining below the threshold for almost the entirety of 2019. According to IHS Markit, the PMI result suggests annual GDP growth of roughly 5.5% in the fourth quarter.

The neutral reading in December was driven by stronger new orders and production growth, which both hit an over one-year high. Rising new business inflows were dominantly boosted by strong domestic demand as new export orders stagnated in the month. Improving demand prompted firms to ramp up purchasing activity in December at a 15-month strong pace, which led to the first rise in pre-production inventories since October 2018. That said, producers had adequate capacity to work through backlogs for the 16th month running, which encouraged firms to keep head counts relatively unchanged. Turning to the outlook, manufacturers were notably more optimistic for the year ahead, with confidence reaching one of the highest levels in six years.

Inflationary pressures intensified in December, with input price inflation accelerating due in part to a weaker ringgit and higher commodity prices. Manufacturers, however, passed on the cost burden through higher output prices.

Commenting on the latest results, Chris Williamson, chief business economist at IHS Markit, noted:

“Malaysia’s manufacturers move into 2020 reporting increasingly brighter business conditions […] Whether expectations of faster growth in 2020 materialise will likely depend on global trade developments and ongoing uncertainty in relation to trade wars, meaning firms continue to focus on keeping costs low.”

Free sample report

Access essential information in the shortest time possible. FocusEconomics provide hundreds of consensus forecast reports from the most reputable economic research authorities in the world.
Close Left Media Arrows Left Media Circles Right Media Arrows Right Media Circles Arrow Quote Wave Address Email Telephone Man in front of screen with line chart Document with bar chart and magnifying glass Application window with bar chart Target with arrow Line Chart Stopwatch Globe with arrows Document with bar chart in front of screen Bar chart with magnifying glass and dollar sign Lightbulb Document with bookmark Laptop with download icon Calendar Icon Nav Menu Arrow Arrow Right Long Icon Arrow Right Icon Chevron Right Icon Chevron Left Icon Briefcase Icon Linkedin In Icon Full Linkedin Icon Filter Facebook Linkedin Twitter Pinterest