Malaysia’s manufacturing sector records third straight month of growth in August, PMI data shows

KUALA LUMPUR, Sept 1 — The Malaysian manufacturing sector experienced its third consecutive month of growth in August, according to the seasonally adjusted S&P Global Malaysia Manufacturing Purchasing Managers' Index (PMI). The PMI stood at 50.2 in August, down from 50.7 in both July and June, indicating only a slight improvement in the sector's health.

S&P Global stated that this growth sequence was the weakest in recent times. Despite the modest expansion in new orders, which was only marginal, some firms took advantage of the situation to expand their payrolls, marking the first increase in employment in four months. However, the expansion in purchasing activity was the weakest in five months as firms relied on inventories to meet demand.

S&P Global economist Maryam Baluch noted that while employment rose, purchasing activity declined as firms drew on inventories to meet demand. Looking ahead, Baluch mentioned that confidence remained muted, suggesting that challenging conditions are likely to persist over the coming year. Nonetheless, softer price pressures could provide firms with the opportunity to support demand growth and lift production.

Malaysian manufacturers faced longer lead times for inputs due to poor weather conditions, low stock availability, and port congestion, but the incidence of delays was only slight and the least pronounced in seven months. In terms of prices, both input costs and output charges rose modestly in August, with inflation rates easing further.

The increase in prices was the weakest in six months and historically subdued. While manufacturers were generally optimistic about output rising over the coming year, positive sentiment remained historically weak and broadly unchanged from July. The optimism was primarily centered around the hope that demand would continue to improve.