Malaysia's purchasing managers' index (PMI) is set to line up with global trends and remain above the 50-level, dividing growth from contraction, for the remainder of the year, as long as global uncertainties become more stable.

This is according to the latest analysis by Public Investment Bank (PublicInvest).

The global manufacturing PMI rose to 50.9 in May as noted by the bank, a 22-month high, indicating the fourth straight month above the 50-level.

Last month, Malaysia’s PMI hit 50.2, an increase from April’s reading of 49.0, signalling renewed improvement within the manufacturing sector following 20 months of moderation, Business Times reports.

“Malaysia's manufacturing sector demonstrated notable improvement by mid-second quarter of 2024, driven by a resurgence in new business and production activities,” the bank stated.

“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 added.

According to PublicInvest, Malaysia’s manufacturing sector is poised for positive growth in 2024, fuelled by favourable forecasts for the global semiconductor market.

“Electrical and electronics (E&E) exports, comprising over 40% of Malaysia's total exports, are expected to benefit significantly. 

“The Ministry of Finance anticipates a 5.5% increase in manufactured goods exports for 2024, reinforcing optimistic expectations,” it added.

Furthermore, the investment bank noted that despite risks from geopolitical tensions and economic uncertainties among major trading partners, Malaysia's exports are projected to grow by 5.4% this year.

PublicInvest added that improved economic governance, reflected in the enhanced competitiveness ranking, further bolsters this positive outlook.