KUALA LUMPUR: Despite concerns over slower factory activities, MIDF Amanah Investment Bank Bhd (MIDF) expects Malaysia’s production activities to continue to grow in the coming months.
In its Economic Brief today, MIDF said growth would be supported by continued recovery in exports on the back of growing demand for manufactured goods and other commodities as well as a sustained rise in domestic spending.
We reiterate our projection that Malaysia’s Industrial Production Index (IPI) will grow stronger at 4.2% versus 2023 at 0.7%, it said.
In September 2024, Malaysia’s manufacturing industry activities experienced contraction for the fourth consecutive month, attributable to broadly flat growth in new orders and greater moderation in production.
The S&P Global Purchasing Managers’ Index (PMI) for the sector fell to 49.5 in September 2024 versus August 2024 at 49.7.
MIDF said the reading in September 2024 was the lowest level since April 2024.
Apart from subdued demand and lower production volumes, it said domestic manufacturers also reported reduced purchasing activities.
“Inventories of both purchases and finished goods were also scaled back in response to muted new order inflows.
Input price inflation softened in the month, falling below its historical average, it said.
Additionally, manufacturing employment rose for the first time since May 2024 as firms reported increased workforce capacity and higher outstanding business.
“Looking ahead, manufacturers expressed cautious optimism about future demand but anticipate an improvement in the next 12 months.
However, concerns about the global economic outlook and risks to recovery remain, it said.
MIDF added it was not a surprise that Malaysia’s Purchasing Managers’ Index also declined in view of lower readings reported by other countries, signalling relatively weaker global manufacturing activities last month.
Source: https://www.freemalaysiatoday.com/category/business/2024/10/02/midf-sees-ongoing-growth-for-malaysias-production-activities/