Malaysia’s manufacturing may have bottomed out, outlook optimistic: AmBank
04 Oct 2021
Malaysia’s manufacturing sector may have bottomed out and manufacturers are optimistic on their outlook, according to AmBank Research.
“Supported by the increasing vaccination rate crossing the 85% level for adults and expected to reach 90% by October, the gradual reopening of the economy, steady global growth, upcycle from electrical and electronics, firm commodity prices, support from resource-based manufacturing activities, and stimulus measures should gradually lift up manufacturing activities,” it said in a statement.
The research firm also noted the adverse effects of the implementation of the movement control order that extended into September.
It said although the headline IHS Markit Malaysia manufacturing Purchasing Managers’ Index remained in the contraction region of below 50 for the fourth consecutive month, the September reading improved to 48.1, the highest since June.
“The September IHS Markit Manufacturing PMI improved to 48.1, albeit still in the contraction region for the fourth consecutive month. The slower contraction was supported by lower contraction of output volumes, new order inflows, and export orders,” it added.
“While we expect the economic performance for the third quarter of 2021 to be in a contraction of around 3.5%, it is possible for the economy to improve modestly in Q4 2021 to around 2%. We project the economy to grow around 3.0% to 3.5% for the full year 2021.”