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Malaysia PMI September 2023

Malaysia: Manufacturing PMI records worst reading since January in September

The S&P Global Manufacturing Purchasing Managers’ Index (PMI) fell to 46.8 in September from August’s 47.8. As such, the index fell further below the 50.0 no-change threshold, signaling a sharper deterioration in manufacturing sector operating conditions compared to the previous month. September’s result marked the weakest reading since January.

September’s downtick was driven by weaker demand, which translated into larger moderations in both new business and production compared to the previous month. Moreover, staffing levels decreased for the fifth consecutive month, and purchasing activity fell to a two-year low.

Meanwhile, input cost inflation was muted relative to the past three years and mainly driven by rising raw material prices. Nevertheless, output costs rose at the sharpest pace in 10 months. Firms in the sector grew more optimistic regarding the future of the sector amid expectations of improving demand, although they were uncertain on the timing of the recovery.

Commenting on the release, Usamah Bhatti, economist at S&P Global Market Intelligence, stated: “Malaysian manufacturers continued to endure a challenging time at the end of the third quarter, with reports of demand weakness widespread in the latest PMI survey, causing stronger moderations in output, new orders and exports. Although the latest figures are still representative of growth in official GDP numbers, the current soft patch looks set to continue over the coming months.”

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