Modest recovery seen in manufacturing sector
Usamah Bhatti, an economist at S&P Global Market Intelligence, said June data indicated a gradual move to stabilisation in the health of the Malaysian manufacturing sector, although operating conditions remained challenging.
Bhatti said firms recorded sustained, albeit softer, moderations in demand and production that were the mildest in four months.
"Most encouragingly, firms raised their employment levels for the first time since last September.
"That said, concerns were raised on the price front, with manufacturers recording the steepest increase in input prices for seven months.
"In response, firms lifted their charges to the greatest extent in nearly a year in a bid to protect margins," he said in a note.
According to the latest data released by S&P Global, the seasonally adjusted S&P Global Malaysia Manufacturing Purchasing Managers' Index (PMI) posted 49.3 in June, up from 48.8 in May.
Coming in only marginally below the neutral 50.0 threshold, the index signalled that business conditions moved closer to stabilisation over the course of the month.
In fact, the PMI was at its highest reading since February.
The latest PMI reading suggests that the modest growth in official gross domestic product statistics in the first quarter of 2025 was sustained into the second quarter.
The data also suggest that the expansion in manufacturing production continued throughout the second quarter.
Overall, the report suggests that optimism regarding the 12-month outlook for output improved only slightly during June.
It noted that the overall degree of optimism was modest but well below the series average.
"Firms were confident that new product launches would help stimulate sales and production, though firms highlighted concerns regarding the health of the global economy," it added.
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