Malaysia: Manufacturing PMI swings into contractionary territory for the first time in six months
The Manufacturing Purchasing Managers’ Index (PMI), produced by S&P Global, fell to 49.6 in March from 50.9 in February. For the first time in six months, the PMI moved below the 50-threshold that separates improving from deteriorating conditions in the manufacturing sector compared to the previous month.
March’s result came amid a sharp increase in price pressures and persistent supply disruptions. Input cost inflation increased due to higher prices of raw materials and transportation, leading firms to pass the costs on to consumers. Moreover, softer demand linked to rising Covid-19 cases in the period led output and new orders to moderate at a quicker pace.
Commenting on the release, Chris Williamson, chief business economist at S&P Global, said:
“The war has not only added to global supply disruptions and led to a surge in energy and other commodity prices, but has driven a further cooling of global demand. While coming months should see the headwind from the pandemic continuing to ease, it’s clear that many producers are worried that the crosswind from the war will subdue the rebound from the latest COVID-19 wave.”