KUALA LUMPUR: Public Investment Bank (PublicInvest) expects Malaysia's purchasing managers' index (PMI) to align with global trends and consistently stay above the 50-level mark throughout 2024, provided global uncertainties stabilise.
The bank noted that the global manufacturing PMI increased to a 22-month high of 50.9 in May, marking the fourth consecutive month above the neutral 50.0 mark.
In May 2024, Malaysia's PMI rose to 50.2 from 49.0 in April, surpassing the 50.0 mark and indicating a renewed improvement in the manufacturing sector after 20 months of moderation.
"Malaysia's manufacturing sector demonstrated notable improvement by mid-second quarter of 2024 (2Q24), driven by a resurgence in new business and production activities.
"Job creation emerged for the first time in five months, though firms showed caution in input procurement due to only marginal gains in new orders. Simultaneously, business sentiment weakened," it said.
PublicInvest stated that the country's manufacturing sector is set for positive growth this year, bolstered by favourable projections for the global semiconductor market.
"Electrical and electronics (E&E) exports, comprising over 40 per cent of Malaysia's total exports, are expected to benefit significantly.
"The Ministry of Finance anticipates a 5.5 per cent increase in manufactured goods exports for 2024, reinforcing optimistic expectations," it said.
The investment bank observed that despite risks from geopolitical tensions and economic uncertainties among key trading partners, Malaysia's exports are expected to increase by 5.4 percent this year.
PublicInvest added that improved economic governance, as seen in the enhanced competitiveness ranking, further supports this positive outlook.
Additionally, the bank projects Malaysia's exports of goods and services to grow by 5.4 percent in 2024.