KUALA LUMPUR (May 2): Malaysia’s Nikkei Manufacturing Purchasing Managers’ Index (PMI) rose markedly to reach a seven-month high in April amid a return to growth for export orders.
The Nikkei Malaysia Manufacturing PMI rose in April to its highest since September 2018, recording 49.4 compared to 47.2 in March to return to its long-run average.
The rise in the PMI is broadly indicative of GDP growth accelerating to just over 5% according to historical comparisons.
In a statement today, IHS Markit which compiles the data, said key to the upturn in the PMI was a renewed improvement in foreign demand in April, which had weakened business trends in prior months.
It said new export orders rose for the first time in five months.
Higher workloads from overseas sources were attributed to business wins in Europe, the US and countries in Asia such as Singapore and Japan, it said.
IHS Markit chief business economist Chris Williamson said April saw the picture of Malaysia’s manufacturing economy brighten considerably, fuelled by the first improvement in export demand since last November.
“The headline PMI showed its largest monthly rise for nearly one and a half years, suggesting manufacturing should help drive faster economic growth to just over 5% at the start of the second quarter, with the trade drag easing compared to prior months.
“The survey also brought signs that firms have an improved appetite to expand capacity, taking on staff in greater numbers as business confidence in the outlook jumped to its highest for over five years, adding to hopes that the slowdown has bottomed out.
“Much will of course depend on the external environment, and a sustained upswing will be contingent on improving global trade flows,” said Williamson.