• Malaysia’s manufacturing PMI improves in February
• Global manufacturing growth gathers pace in February
• Manufacturing activities rebounding in February as Omicron wave subsides
• ASEAN manufacturing output stays resilient despite COVID-19 surge

Malaysia’s manufacturing PMI improves in February

February saw the health of the Malaysian manufacturing sector improve at a stronger pace. The headline IHS Markit Malaysia Manufacturing PMI registered 50.9 in February, up from 50.5 in January. This pointed to a stronger improvement in the health of the Malaysian manufacturing sector, and extended the current sequence of expansion to five months. Both production and new order volumes moderated for the second successive month in February. Positively, foreign demand for Malaysian manufactured goods resumed growth for the second time in three months. Moreover, the expansion was the quickest for ten months amid stronger demand in the US and parts of Asia. While output and new orders were subdued, businesses reported a further rise in purchasing activity. The rate of expansion was modest and the fourth in as many months. Material shortages also contributed to a further increase in input prices in February. That said, while the rate of input price inflation remained robust, cost burdens rose at the softest pace since last September. Concurrently, firms sought to partially pass higher costs on to customers, as evidenced by a sustained rise in input prices. Goods producers reported job shedding for the second time in the past three months in February. Employment levels fell marginally, mainly due to firms reporting a lack of available workers, notably from abroad. As demand conditions were subdued, firms saw outstanding business rise at a fractional rate that was the slowest since last August. Malaysian manufacturers expressed optimism regarding the year-ahead outlook for the eighth month running in February. While at a four-month low, positive sentiment remained robust, underpinned by hopes of a domestic and international recovery in demand as the pandemic recedes.

Source: BIMB Securities Research - 2 Mar 2022