Kuala Lumpur: The seasonally adjusted S and P Global Malaysia manufacturing purchasing manager’s index (PMI) inched up to 48.8 in May, compared to 48.6 in April, indicating a continued, though softer moderation in operating conditions.

According to BERNAMA News Agency, S and P Global Market Intelligence economist Usamah Bhatti stated that the PMI data for May showed muted business conditions in the Malaysian manufacturing sector as production levels were reduced due to subdued new orders. He noted that the rates of reduction in both production and new orders eased to three-month lows and were only marginal overall. This data suggests that the gross domestic product (GDP) growth is likely to have maintained a similar pace as observed in the first quarter of the year.

Bhatti pointed out that manufacturing firms experienced a gradual increase in cost burdens, with average input costs rising at the fastest rate in six months. The survey evidence highlighted that adverse currency movements and US tariffs on raw materials contributed to increased expenses, particularly from abroad. Despite these challenges, sentiment remained positive, with firms expecting higher output in the coming year. However, the degree of confidence decreased from April to the lowest level since mid-2021, amid concerns about US trade policy and a shortage of suitable workers.

Furthermore, S and P Global reported that Malaysian manufacturers noted employment levels remained unchanged midway through the second quarter, halting a seven-month trend of job reductions. The muted inflow of new orders allowed firms to continue addressing outstanding business, with backlogs slightly lower in the latest survey month.