Malaysia: Manufacturing PMI rises again in December
The Manufacturing Purchasing Managers’ Index (PMI), produced by IHS Markit, posted another increase in the final stretch of the year, rising to 52.8 in December from 52.3 in November. As a result, the PMI moved further above the 50-threshold that separates improving from deteriorating conditions in the manufacturing sector compared to the previous month.
December’s result was chiefly driven by stronger expansions in both new business and output, as the easing of Covid-19 curbs buoyed client confidence, and domestic demand in turn. Similarly, stronger export demand, notably from China and the U.S., resulted in higher numbers of new foreign orders. That said, raw material and labor shortages—with employment levels falling again in the month—put a lid on production growth. On the price front, persistent supply chain disruptions pushed input cost inflation to a seven-month high, which prompted firms to hike their selling prices.
Commenting on manufacturers’ sentiment, Chris Williamson, chief business economist at IHS Markit, said:
“Encouragingly, business expectations for the coming year remained strong overall as a fifth of companies reported optimism that the worst of the pandemic had passed. That said, the degree of optimism eased from November as the outlook remained relatively clouded due to uncertainty regarding the duration of supply chain disruptions, raw material shortages and further disruption caused by new variants of Covid-19.”