KUALA LUMPUR: Malaysia is expected to sustain its economic growth momentum despite a drop in the manufacturing purchasing manager’s index (PMI) from 49.1 in September to 48.7 last month, according to MIDF Research.
The research firm said growth would be driven by rising domestic demand, while external trade remained robust, defying concerns that a slowdown is imminent.
“While manufacturers in other countries expressed concerns on the outlook, Malaysia’s manufacturers continued to indicate optimistic sentiment,” MIDF said.
Nonetheless, it said, it was maintaining a cautiously optimistic outlook for domestic production and trade activities, due mainly to uncertainties on the external front.
Final demand from advanced economies are expected to weaken amid concerns over recession risk, tighter Covid-19 restrictions in China and the escalation of geopolitical and trade tensions, it added.
The research house said there also were signs that regional trade was weakening. For instance, South Korea reported yesterday that its exports declined 5.7% year-on-year (y-o-y) in October 2022 following weak demand from China.
Similarly, Taiwan also reported a 5.3% y-o-y fall in exports in September 2022, dragged down by weaker shipments to China.
Separately, S&P Global Market Intelligence said growth has softened across Asean manufacturing firms after ending the third quarter strongly.
Its latest S&P Global PMI survey data revealed that headline PMI signalled the slowest improvement in operating conditions across the region since the current series of expansion in October 2021, at 51.6 in October 2022, down from 53.5 in September 2022.
Its economist Maryam Baluch said there is a slowdown in growth across Asean.
“Operating conditions improved at the weakest rate in the current 13-month sequence of expansion. Softer upturns were noted for both output and new orders. While expansion in production levels remained resilient, factory orders grew sluggishly in October,” she said.
“The slowdown also resonated in weak hiring activity and a softer expansion in purchasing levels, with firms noting rates of growth ticking down from the record speeds seen in the preceding month,” she added.
Nonetheless, manufacturers across the region maintained their positive outlook, with business confidence notably rising to the highest since April 2016, Baluch said.
The survey data also revealed that the majority of Asean constituents recorded improvement across their manufacturing sector during October, with the exception of Myanmar and Malaysia.
Malaysia and Myanmar reported contractions for the second and sixth consecutive months, respectively. Malaysian manufacturers saw a quicker downturn during October, said S&P Global.
Source: https://www.freemalaysiatoday.com/category/business/2022/11/02/malaysia-likely-to-keep-growth-impetus-says-research-firm/