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Malaysia PMI June 2020

Malaysia: Manufacturing PMI rises in June back into expansionary territory

The manufacturing Purchasing Managers’ Index (PMI), produced by IHS Markit, jumped to 51.0 in June from May’s 45.6, and marked the highest reading since September 2018. As a result, the PMI moved back above the 50-threshold indicating an improvement in operating conditions.

The improvement follows the lifting of lockdown measures that led to a rally in manufacturing output and a recovery in new orders. That said, while the domestic market improved, external demand remained downbeat. Employment was broadly steady in June, while input and output prices rose. Business confidence strengthened as manufacturing firms expected a further rebound in economic activity.

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

“The Malaysian manufacturing sector showed encouraging signs of recovery in June. Output rose at a rate unsurpassed in the survey’s eight-year history as increasing numbers of firms reopened facilities or raised factory operating capacity after COVID-19 related disruptions. Such a rapid turnaround in production since the severe collapse in April bodes well for a v-shaped recovery. However, a sustained recovery is by [no] means assured, and growth could easily lose momentum after the initial rebound. ”

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