Yesterday, S&P Global reported that Malaysia’s seasonally adjusted manufacturing purchasing managers’ index (PMI) edged up to a five-month high of 48.8 in March from 48.4 in February 2023, indicating improving demand in the manufacturing sector.

In a note today, Kenanga IB also projected this year’s GDP growth to settle at 4.7%, backed by resilient domestic demand and policy measures under the 2023 federal budget.

“This will be further boosted by higher foreign tourist arrivals and the impact of China’s reopening,” it said.

On the manufacturing sector’s performance, Kenanga IB said although the manufacturing PMI remained at a contraction level of 47.9 on average in Q1 2023 against 48.1 in Q4 2022, it believed the country’s manufacturing activity could sustain a moderate recovery in the coming months.

It added that the recovery would be mainly supported by the domestic-oriented sector.

A reading above 50% signals an expansion in business activity while a figure below indicates a contraction.