Nikkei: Malaysian manufacturers upbeat on future output volume

Nikkei: Malaysian manufacturers upbeat on future output volume

KUALA LUMPUR: Malaysian manufacturers were the most upbeat towards future output volumes since October 2013, which was a multi-year high, despite the current manufacturing trend taking a dip.

According to the May Nikkei Purchasing Managers Index (PMI), businesses have planned new product launches and expectations of stronger demand, particularly from overseas markets, underpinned by the improvement in confidence.

“More positively, downward pressure on manufacturing growth has eased since earlier in the year and expectations towards the coming 12 months is at its most positive in over five and a half years,” it said in its report released today.

It added the headline Nikkei Malaysia Manufacturing PMI recorded 48.8 in May, down slightly from April’s seven- month high of 49.4, but below the long-run average.

“Overall, the PMI is broadly indicative of annual gross domestic product (GDP) growth of approximately five per cent, according to historical comparisons. Manufacturing output remained under pressure during May, reflecting challenging demand conditions facing the sector, particularly from overseas,” it said.

The report also said that based on its output gauge survey was close to April’s six-month high, suggesting the forces weighing on output growth, have eased so far in the second quarter.

According to its panellists, demand growth from clients in Europe, Thailand, Indonesia and the United States had slowed, weighing on total order book volumes.

“New export orders, subsequently returned to contraction in May, having revived slightly during the previous month. However, despite continuing to signal a headwind from weak demand, the survey gauge of total new orders is running at its second-highest since the third quarter of last year so far in the second quarter,” Nikkei said.

It also said purchasing activity also declined in May, partly due to an increased focus on cost control, amid slower production growth.

“Inventories also reduced slightly as part of stock adjustment measures. Lower buying volumes helped ease pressure on supply chains, with lead times broadly unchanged since April,” it added.


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