KUALA LUMPUR: Malaysia's Purchasing Managers' Index (PMI) is likely to remain below the pivotal 50-point threshold in the near term, mirroring the global manufacturing PMI.
Public Investment Bank research (PublicInvest) said this is given the persisting interplay of prevailing factors that mirror enduring fragility in external demand.
"We anticipate this trend to persist before potentially bottoming out in the latter part of the first half of 2024 (1H24)," it said in a note.
Malaysia's manufacturing PMI held steady at 47.9 in December.
According to S&P Global, the recent PMI figures suggest that gross domestic product (GDP) growth is sustaining a comparable momentum to that observed in the second and third quarters of 2023.
Meanwhile, PublicInvest said the World Semiconductor Trade Statistics (WSTS forecasts a robust recovery in global semiconductor sales for 2024, now estimated at a growth rate of 13.1 per cent, up from the previous projection of 11.8 per cent.
This anticipated growth marks a potential pivotal moment for both Malaysia's manufacturing sector and the global semiconductor industry, it said.
Furthermore, PublicInvest said the Ministry of Finance anticipates a substantial 5.5 per cent expansion in exports of manufactured goods in 2024, further underpinning the positive outlook.
"We expect Malaysia's exports of goods and services to rebound to a positive growth of 5.4 per cent in 2024.
"However, sustained downside risks persist, including the potential for prolonged tightening of financial and monetary conditions, continued drag on China's economy from the property sector, and ongoing trade tensions between the US and China, alongside geopolitical tensions in the Middle East," it added.