Malaysia’s manufacturing activity to improve

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KUALA LUMPUR: Research houses in Malaysia on Monday anticipated the country’s manufacturing activity to improve in the near term after S&P Global Malaysia manufacturing purchasing managers’ index (PMI) rose to a seven-month high of 47.9 in November.

Kenanga Research said in a note on Monday that the slowdown in Malaysia’s manufacturing activity may reach its bottom and is expected to gradually improve in the near term.

According to the research house, the recent uptick in Malaysia’s manufacturing PMI suggests a possible resurgence in the health of the manufacturing sector as the year draws to a close, with the positive momentum extending into 2024.

This is partly attributed to the potential upswing in the technology sector and China’s gradual recovery, both of which are expected to contribute to an improvement in Malaysia’s export performance moving forward, it said.

Consequently, it forecast that Malaysia’s gross domestic product growth will continue to expand in the final quarter this year, reaching 3.7 percent, primarily driven by a resilient domestic demand, bolstered by year-end festive spending and a rise in tourist arrivals.

Additionally, it said the growth will also be supported by increased fiscal spending, as the government typically ramps up spending toward the year’s end.

MIDF Research also said in a note that the better PMI reading and improved manufacturers’ optimism reflected a more positive outlook for the sector. This is also aligned with its expectations for recovery in Malaysia’s trade and production activities.



“On that note, we continue to expect Malaysia’s exports of goods will pick up and rebound in 2024,” it said.

PublicInvest Research said in a note that against the backdrop of a challenging global economic landscape, Malaysia’s manufacturing sector appears poised to navigate the prevailing headwinds, albeit with cautious optimism.

Notably, it is anticipated that this sector will echo the current cyclical downturn observed in the semiconductor industry, a domain marked by sustained challenges to growth.

According to the research house, it is probable that Malaysia’s PMI will align with global trends in the near term, consistently indicating a level below the crucial expansion threshold of 50 points.

Going into next year, it said the Ministry of Finance anticipates a 5.1-percent expansion in gross exports.

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