• Malaysia manufacturing sector falls back into contraction
• Global manufacturing PMI at 21-month high in August
• US manufacturing sector signalled a solid improvement in August
• Eurozone manufacturing sector stayed strong in August
• UK manufacturing production rises at fastest pace as re-opening of economy continues 
• Expansion in China’s manufacturing sector continued in August
• Japan's manufacturing sector moves closer to expansion
• Asian manufacturing sector improving

Malaysia manufacturing sector falls back into contraction

The IHS Markit Malaysia Manufacturing PMI fell to 49.3 in August 2020 from 50.0 in a month earlier. This was the first contraction in the sector since May, amid public health measures aimed at curbing the spread of the ongoing coronavirus pandemic. Manufacturing production was stable in August, losing some of the momentum seen during the initial rebound from lockdown. The latest reading followed a joint-record expansion in June and further growth in July. Respondents indicated that demand continued to recover from the worst of the pandemic-related downturn, with the pace of moderation broadly in line with that seen in June and July. The new orders index remained much higher than seen during the nadir of the Covid-19 downturn in April as some respondents saw ongoing improvements in demand following the loosening of virus-related restrictions. New export orders continued to deteriorate, and to a greater extent than total new business amid ongoing restrictions in a number of export markets. The lack of capacity pressure and efforts to reduce costs led firms to scale back employment. The resulting reduction in staffing levels was the sharpest since the survey began in July 2012. Material shortages, and particular issues receiving imported goods due to Covid-19 led to a ninth successive monthly lengthening of suppliers' delivery times. Hopes that new orders will expand on the back of a return to more normal business conditions supported optimism among firms that expect manufacturing production will increase over the coming year. That said, concerns around Covid-19 remained, leading sentiment to dip below the series average.

Source: BIMB Securities Research - 2 Sept 2020