MIDF OPTIMISTIC ON MALAYSIA'S TRADE OUTLOOK DUE TO EXPORT DEMAND

KUALA LUMPUR, Dec 3 (Bernama) -- MIDF Amanah Investment Bank Bhd remains optimistic about Malaysia’s trade outlook and the manufacturing sector’s growth prospects, given the improved export demand. 

In a note today, the research firm said it expects Malaysia’s production activities to continue to grow, supported by the recovery in external demand.

In the seasonally adjusted S&P Global Malaysia Manufacturing Purchasing Managers’ Index (PMI) in November 2024, export orders from international markets grew, likely due to growing demand across the Asia-Pacific region.

Meanwhile, the index slipped further to 49.2 in November 2024 (October 2024: 49.5), the lowest reading in seven months and extending contraction to six consecutive months. 

The decline in November 2024, while reflecting broad-based weaknesses in the manufacturing sector, was primarily attributed to contractions in new orders, output and inventory levels. 

Notably, new orders registered the sharpest fall in seven months. Backlogs of work stabilised, reaching a four-month high, largely due to limited production capacity. 

Purchasing activity, along with stocks of inputs and finished goods, shrank at a slower rate. 

Additionally, delivery time continued to lengthen for the seventh straight month, largely explained by supply chain disruptions linked to the ongoing Red Sea crisis. 

Cost pressures for manufacturers elevated as input prices rose, mainly driven by higher commodity prices and a depreciating ringgit, albeit at the slowest rate in nine months. 

Employment showed little changes, and business confidence remained solid but stayed below its long-run average of 56.2 as firms remained cautious about the uncertain timeline of a domestic demand recovery. 

The overall PMI trajectory reflected still sluggish activities in the manufacturing sector, with downward pressures from muted demand domestically and external shocks such as elevated raw material prices and global supply chain disruptions. 

-- BERNAMA