Malaysia
Foresee 3Q2019 GDP to hover around 4.3%–4.5%

September’s manufacturing Purchasing Manager’s Index (PMI) continued to remain in the contraction region for the 12th consecutive month. Nevertheless, the manufacturing PMI in September somewhat improved to 47.9 as a result of better new orders and sustained demand. Despite exhibiting a slightly better reading, it remains unclear if manufacturing has bottomed out.

With external headwinds remaining strong, added with domestic challenges, it somewhat suggests that the domestic economy is poised to grow around 4.5% for the full year of 2019 with our upside GDP likely to reach 4.7%. We believe 3Q2019 GDP should hover around 4.3%–4.5%.

• September’s manufacturing Purchasing Manager’s Index (PMI) continued to remain in the contraction region for the 12th consecutive month. Nevertheless, the manufacturing PMI in September somewhat improved to 47.9 from 47.4 in August as a result of better new orders and sustained demand.

• Despite exhibiting a slightly better reading, it remains unclear if manufacturing has bottomed out. This is due, in part, to a weaker potential outlook whereby external demand is envisaged to soften. Firms are also foreseeing margin pressures due to discounts given to customers in an environment where competition is intense and rising production costs.

• With external headwind remaining strong, added with domestic challenges, it somewhat suggests that the domestic economy is poised to grow around 4.5% for the full year of 2019 with our upside GDP likely to reach 4.7%. We believe 3Q2019 GDP should hover around 4.3%–4.5%

Source: AmInvest Research - 2 Oct 2019