In a research note, it said factors contributing to this include subdued production, limited new orders, and a decline in new export orders, though at a slower pace.

“On a positive note, the reading for China and the US, which are among Malaysia’s largest trading partners, rebounded into the favourable territory, and if this situation persists, it may indicate that the worst is already behind us,” it added.

Against this backdrop, AmBank Research reiterated its gross domestic product (GDP) forecast of 4% for 2023 and expects the economy to grow by 4.5% in 2024.

It noted that domestically, the manufacturing PMI has been in contraction for 13 consecutive months.

Malaysia’s industrial production index (IPI) declined by 0.3% in August from a growth of 0.7% in July 2023.

Sector-wise, the manufacturing sector contracted by 0.6%, while production in the mining sector increased by 0.1%, and electricity production accelerated to 1.9%.

Meanwhile, Public Investment Bank envisaged a pronounced deceleration in the IPI growth, primarily attributable to the unforeseen and protracted softness in global demand.