• Malaysia’s manufacturing PMI slips further in June

• Global manufacturing PMI at lowest level since October 2012

• US manufacturing near stagnation

• Eurozone manufacturing sector remains in contraction

• UK manufacturing downturn deepens

• China’s manufacturing contracts in June

• Japan’s softer manufacturing conditions continues in June

• ASEAN manufacturing slips into contraction

Malaysia’s manufacturing PMI slips further in June

The manufacturing sector in Malaysia continued to contract in June as the manufacturing PMI registered 47.8, down from 48.8 in May. Manufacturing output continued to be restricted in June by challenging demand conditions, notably from export markets. Although the survey's production index fell for a second month in succession, the average for the second quarter as a whole was above that seen in the opening quarter of 2019. Analysis of comparable historical official data on Malaysian manufacturing output suggests that, at current levels, the survey’s output index signals annual production growth of just over 3%. Export orders consequently fell at a faster rate in June weighing down the overall new orders index. Malaysian manufacturers adopted a balanced approach to hiring, with employment levels remaining broadly unchanged since May. On the price front, input cost inflation dipped slightly, but was the second-strongest seen so far in 2019. Nevertheless, companies anticipate that current difficulties will be short-lived. Malaysia’s manufacturing sector is optimistic as business confidence about the outlook strengthened to its highest since October 2013 despite manufacturing’s PMI continued to fall in June. With the survey finding a greater number of respondents anticipating higher output over the next 12 months, economic growth is expected to accelerate further.

Source: BIMB Securities Research - 2 Jul 2019