KUALA LUMPUR: The recovery in the Malaysian manufacturing sector continued in July, according to the headline IHS Markit Malaysia Manufacturing Purchasing Managers' Index (PMI).
After rising at a joint-record pace in June, output continued to expand in the latest survey period, with trends in new orders much improved since the nadir of the Covid-19 downturn in April.
"The ongoing effects of the pandemic meant that firms continued to operate below capacity and therefore expressed further caution around hiring, particularly in the face of rising input costs.
"Output prices also increased at the start of the third quarter," IHS Markit said today.
The PMI, a composite single-figure indicator of manufacturing performance, posted 50.0 in July, down marginally from 51.0 in June.
This is still well above the readings seen during the worst of the Covid-19 downturn and above the survey's long-run average of 49.0.
Encouragingly, manufacturing production rose for the second month running in July, building on the joint-record expansion registered in the previous month.
"Respondents linked higher output to signs of an improving trend in new orders following an easing of the movement control order," IHS Markit said.
The New Orders Index was unchanged on the level seen during the previous month in July, but that represents a much improved picture on the situation in April and May.
IHS Markit said some respondents indicated that demand remained fragile, however, as the pandemic continued to impact the sector.
This was particularly the case with regards to new export orders, which softened to a greater extent than in June.
A number of firms expects market demand to strengthen over the coming year, supporting overall confidence in the 12-month outlook for production.
Sentiment was down only slightly from that seen in June.