Malaysia's manufacturing PMI rises slightly to 49.5 in February

KUALA LUMPUR, March 1 (Xinhua) -- The seasonally adjusted S&P Global Malaysia Manufacturing Purchasing Managers' Index (PMI) was 49.5 in February, up from 49 in January, signaled a slight deterioration in business conditions that was the softest since the current sequence of decline began in September 2022.

S&P Global Market Intelligence said in a statement on Friday that the historical relationship between the PMI and official data suggests that both gross domestic product (GDP) and manufacturing production are set to trend upwards and improve modestly in the first quarter of 2024.

S&P Global Market Intelligence economist Usamah Bhatti said the latest PMI suggests that firms began to see demand conditions turn a corner during February.

He said that there were only slight moderation in output, total new orders and exports as firms mentioned pockets of demand building up in the manufacturing sector.

"Further encouragement came from a broad stabilization in backlogs of work, a sign that capacity pressures were also starting to build," he said.

At the same time, he noted employment levels were broadly unchanged, as efforts to reduce costs by lowering headcount were offset by the hiring of new full-time staff.

He also said there were indications of a pick-up in cost inflation in February, but it was far removed from the pace recorded in the three years following the COVID-19 pandemic.

"In fact, firms raised their selling prices only slightly over the month, amid reports that some manufacturers reduced charges in an attempt to stimulate sales," he added.