Malaysia: Manufacturing PMI inches down in February
The manufacturing Purchasing Managers’ Index (PMI), produced by IHS Markit, dropped down to to 47.7 in February from January’s 48.9, logging the lowest reading in nine months. As a result, the index moved further below the 50-threshold that separates improving from deteriorating conditions in the manufacturing sector.
February’s downturn was chiefly driven by declining production and new orders, as Covid-19 restrictions at home and abroad continued to weigh on demand. That said, manufacturers cut staffing only marginally, while firms remained strongly optimistic as regards output growth in the 12 coming months, with confidence hitting a five-month high. On the price front, input costs rose for the ninth successive month, amid raw material shortages, but did so at a somewhat weaker rate than in the previous month. This, prompted manufacturers to mildly increase their selling prices.
Commenting on February’s print, Chris Williamson, chief business economist at IHS Markit, said:
“February was another tough month for manufacturers, with the pandemic continuing to adversely affect order books and disrupt supply lines and shipping. […] However, with global demand showing signs of reviving, production growth should start to pick up again in the second quarter, and it was encouraging to see business optimism about the year ahead improve after its weak start to the year. Businesses are increasingly anticipating a resurgence in demand as the impact of the pandemic eases as the year proceeds.”