• Malaysia manufacturing downturn eases sharply
• Global manufacturing PMI downturn continues but pace of contraction eases

• Long road to recovery for US manufacturing

• Eurozone manufacturing downturn lessens

• Rapid downturn in the UK manufacturing sector continues

• China’s manufacturing expands but recovery remains bumpy

• Japan’s manufacturing PMI slides further

• Asian countries showed less traumatic contraction in manufacturing PMI

Malaysia manufacturing downturn eases sharply

Malaysia's manufacturing sector continued to contract in May, albeit at a much slower rate. The IHS Markit manufacturing PMI rose sharply to 45.6 in May, from April's survey-record low of 31.3. Despite such a large month-on-month rise in the headline figure, it remained below the neutral 50.0 mark and was therefore indicative of a further deterioration in manufacturing sector conditions. That said, the latest decline was considerably weaker than at the start of the second quarter. Latest survey data pointed to a further reduction in manufacturing output across Malaysia, although the rate of contraction eased substantially since April. New orders placed with Malaysian goods producers continued to fall during May, which was attributed to the ongoing measures both domestically and overseas to stem the spread of the coronavirus. The deterioration in demand was solid, although significantly weaker than seen in April. Weak export demand persisted in May, weighing heavily on overall order books. Supply-side hindrances remained unprecedented in May and continued to disrupt Malaysia's manufacturing sector. Employment in was held broadly stable during May, with 98% of firms signalling no change in their payrolls. This contrasted with April, where staffing numbers fell at the fastest rate on record. Looking ahead there were signs of optimism as survey data pointed to a rise in business confidence. The Future Output Index rose to a three-month high, with stronger sentiment underpinned by expectations of a recovery in demand.

Source: BIMB Securities Research - 2 Jun 2020