Malaysian manufacturers recorded the weakest performance since March according to the Nikkei Malaysia Manufacturing Purchasing Managers’ Index in July. (www.nst.com.my)
The headline PMI posted at 48.1, slightly up from 47.1 in June. “The latest reading was the highest since March. This reflected softer declines in output, new orders and stocks of purchases,” according to Markit, which compiles the monthly surveys.
At the start of the third quarter, production contracted at the softest rate in six months, helped by a slower fall in new orders. Buying activity also declined at a weaker pace, although remained solid in the context of historical data. Meanwhile, goods producers cut back on their staff numbers in July, albeit at only a marginal rate.
The PMI is a composite single-figure indicator of manufacturing performance and is derived from indicators for new orders, output, employment, suppliers’ delivery times and stocks of purchases. Any figure greater than 50.0 indicates overall improvement of sector operating conditions. “Contributing to the overall decline in manufacturing conditions was a contraction in output. However, the rate of decrease eased to the weakest since January.
“It said total new orders declined at the softest rate since March and one that was slower than the average over the current 17-month sequence of contraction. Resulting from falls in new orders, buying activity was scaled back. The rate of decline eased since June, but was still sharper than the average over the current 14-month period of contraction.
Amy Brownbill, an economist at Markit, which compiles the survey, said cost inflationary pressures eased for the first time in four months, helping producers to improve their growth margins.