• Malaysia’s manufacturing sector sees first growth since January

• Global manufacturing at 21-month low in August

• US manufacturing activity accelerates in July

• Eurozone manufacturing activity growth softens

• UK manufacturing growth at 25-month low

• US-China trade dispute putting downward pressure on China’s manufacturing activity

• Japan's manufacturing sector improves moderately in August

• ASEAN manufacturing edges higher

Malaysia’s manufacturing sector sees first growth since January

Malaysian manufacturing conditions improved for the first time in seven months in August. The Nikkei Malaysia manufacturing PMI - an indicator of economic health for the manufacturing sector - rose from 49.7 in July to 51.2 in August. The upward movement in the headline PMI index was driven by a rise in new orders for the first time in seven months during August. Strong market demand as well as customers placing their orders before the Sales and Service Tax (SST) takes effect was the key factors cited by panellists behind the latest upturn. At the same time, following a marginal rise in July, new export orders broadly stagnated during August. Meanwhile, output rose for the second consecutive month during August. Although modest, the rate of expansion accelerated to the fastest since November 2017. Input costs facing Malaysian manufacturers rose during August. However, the rate of inflation was marginal and eased to the slowest since February 2015. Meanwhile, Malaysian manufacturers raised their output charges for the second consecutive month in August, albeit only fractionally. Looking ahead, business sentiment towards the 12- month outlook was the strongest in four months during August, with confidence rooted in positive forecasts of sales and an expected improvement in underlying demand.

Source: BIMB Securities Research - 5 Sept 2018