Malaysia: Manufacturing PMI rises sharply in May
The manufacturing Purchasing Managers’ Index (PMI), produced by IHS Markit, jumped to 45.6 in May from April’s 31.3, which had marked the lowest result in the history of the survey. Nevertheless, the index remained below the 50-threshold, signaling a deterioration in operating conditions.
May’s improvement reflected a softer reduction in manufacturing output, as some companies were allowed to restart operations. Demand continued to fall, however, amid ongoing social distancing restrictions, domestically and abroad, to curtail the spread of the virus. Meanwhile, employment remained broadly stable, with 98% of firms reporting no changes in their payroll. Looking ahead, surveyed companies showed signs of optimism on expectations of a swift recovery of demand.
Commenting on the outlook, Chris Williamson, chief business economist at IHS Markit, noted:
“A strong rise in the PMI provides the first major indication that the economic downturn caused by the COVID-19 pandemic appears to have bottomed out. While manufacturing activity continued to fall at a steep rate in May, declines in output and order books were notably less severe than seen in April. Barring any second wave of infections, the coming months should see signs of at least stabilisation as restrictions to contain the virus are gradually eased both at home and in export markets.”