KUALA LUMPUR: The Malaysian manufacturing sector showed signs of recovery in August against the backdrop of rising exports.
In a statement, IHS Markit said the sector registered the first expansion of production and overall improvement in operating conditions since April.
The headline Nikkei Malaysia Manufacturing Purchasing Managers’ Index(PMI) – a composite single-figure indicator of manufacturing performance – rose above the 50.0 no-change mark to 50.4 in August, up from July’s 48.3 and indicating the first improvement in operating conditions since April.
“Although total new orders continued to decline, the rate of contraction softened against a backdrop of rising exports,” it said.
Firms also expanded workforce numbers, which enabled them to keep on top of overall workloads,whilst also indicating a preference for destocking, by opting to deplete inventories of both inputs and finished goods.
Cost pressures continued to ease, whilst business optimism was its highest since December 2013.
In particular, firms highlighted growing demand from foreign markets in China, Southeast Asia and the Middle East.
Optimism among panellists regarding the coming 12 months reached its highest level since December 2013.
Higher production and exports in August, combined with hopes of growth in new orders, were linked to the improvement in business outlook.
IHS Markit is a global leader in information, analytics and solutions for the major industries and markets that drive economies worldwide. — Bernama