According to a statement by S&P Global Market Intelligence on Monday, the health of the Malaysian manufacturing sector was generally steady as the second quarter came to an end. 

New orders showed consecutive monthly growth, bolstered by increased exports, although overall demand remained muted. 

As a result, companies slightly reduced production levels after an increase in May and maintained stable staffing levels. 

Although business confidence fell to a 10-month low, the pace of input cost inflation was stable, as prices again rose strongly. 

At the same time, businesses increased their prices at a quicker rate, marking the fastest pace since September 2022.  

The seasonally adjusted S&P Global Malaysia Manufacturing Purchasing Managers’ Index (PMI) recorded a reading of 49.9 in June, The Edge Malaysia reports. 

The index, which closely approached the neutral 50.0 mark, indicated largely steady business conditions throughout the month. This represented a somewhat less favourable outlook compared to May, when operating conditions showed slight improvement with a PMI reading of 50.2. 

The average reading for the second quarter of the year was the highest since the third quarter of 2022, indicating a positive outlook for economic growth over the quarter.

Furthermore, the data indicated that the solid expansion observed in official manufacturing production data has continued beyond April.

In June, new orders continued to rise for the second consecutive month. However, feedback from respondents indicated that demand remained subdued, resulting in a fractional rate of expansion that was slower than May. 

The overall increase in new business partly stemmed from sustained growth in new export orders, which extended their upward trend for the third consecutive month.

Businesses noted increased new orders from clients across various Asia Pacific markets, including Australia, the Philippines, and Vietnam. 

Furthermore, the inflation rate in Malaysia remained robust and unchanged compared to May. Although the pace of cost inflation stayed steady, companies accelerated the rate at which they raised their own selling prices, marking the fastest increase since September 2022.