The seasonally adjusted S&P Global Malaysia Manufacturing Purchasing Managers’ Index (PMI) posted 47.8 in May, down from 48.8 in April, S&P Global Market Intelligence said Thursday.
The latest reading signaled further challenges for firms in the manufacturing sector, with business conditions moderating to the greatest extent since January, the global research house said in a statement.
According to the statement, the figures for the second quarter so far suggest that Malaysia’s gross domestic product (GDP) growth will hold steady around the 5.5 percent year-on-year mark posted in the first quarter.
The latest data, meanwhile, is consistent with official manufacturing data nearing stagnation on a yearly basis.
S&P Global Market Intelligence Economics Director Andrew Harker said Malaysian manufacturers are clearly enduring a challenging time at present, with reports of demand weakness widespread in the latest PMI survey.
Although the latest figures are still representative of growth in official data, he said the sector appears to be going through a soft patch that may last for some months.
Reflecting this, he said firms are being cautious in terms of their spending, pulling back on input purchasing and scaling back employment.
“A degree of spare capacity has become evident, not least in supply chains where delivery times improved to the greatest extent in just over a decade in May,” he added.