KUALA LUMPUR: MIDF Amanah Investment Bank Bhd remains optimistic about Malaysia’s trade outlook and the manufacturing sector’s growth prospects, given the improved export demand. In a note today, the research firm said it expects Malaysia’s production activities to continue to grow, supported by the recovery in external demand.

According to BERNAMA News Agency, the seasonally adjusted SandP Global Malaysia Manufacturing Purchasing Managers’ Index (PMI) in November 2024 showed growth in export orders from international markets, likely due to rising demand across the Asia-Pacific region. Meanwhile, the index slipped to 49.2 in November 2024 from 49.5 in October 2024, marking the lowest reading in seven months and extending contraction to six consecutive months.

The decline in November 2024 reflects broad-based weaknesses in the manufacturing sector, primarily due to contractions in new orders, output, and inventory levels. Notably, new orders registered the sharpest fall in seven months. Backlogs of work stab
ilized, reaching a four-month high, largely due to limited production capacity.

Purchasing activity, along with stocks of inputs and finished goods, shrank at a slower rate. Additionally, delivery times continued to lengthen for the seventh straight month, largely due to supply chain disruptions linked to the ongoing Red Sea crisis. Cost pressures for manufacturers elevated as input prices rose, driven by higher commodity prices and a depreciating ringgit, albeit at the slowest rate in nine months.

Employment showed little change, and business confidence remained solid but below its long-run average of 56.2, as firms remained cautious about the uncertain timeline of a domestic demand recovery. The overall PMI trajectory reflects sluggish activities in the manufacturing sector, with downward pressures from muted domestic demand and external shocks such as elevated raw material prices and global supply chain disruptions.