Malaysia: Manufacturing PMI hits six-month high in October
November 1, 2019
The manufacturing Purchasing Managers’ Index (PMI), produced by IHS Markit, rose to 49.3 in October from 47.9 in September. Nevertheless, the headline reading remained below the neutral 50-threshold that separates contraction from expansion in the manufacturing sector, signifying deteriorating operating conditions in the manufacturing sector.
The uptick was driven by improvements in the output and new orders indices: The output index rose to a 12-month high, while new orders benefited from new product launches and stronger inflows of new work from existing clients. Employment increased in October, as did backlogs of work. However, external demand remained an area of concern, with export orders dropping for the second successive month and anecdotal evidence suggesting softening demand from key markets China and Europe. In terms of prices, input costs declined in October, with output prices falling as a result.
Commenting on October’s print, Chris Williamson, chief business economist at IHS Markit, noted that it “remains too early to say that manufacturing has turned a corner, but we are especially encouraged by producers having become more optimistic about the outlook, which is feeding through to welcome news of improved employment.”
Author: Stephen Vogado, Economist