S&P Global said in a statement that the latest PMI reading suggested that gross domestic product (GDP) growth is running at a slightly improved rate than seen in the first quarter of 2024.

“Additionally, it points to modest year-on-year improvements in official manufacturing production data,” it said.

S&P Global Market Intelligence economics associate director Pan Jingyi said the latest PMI data revealed that business conditions in the Malaysian manufacturing sector started to improve again midway through the second quarter of 2024.

She said this indicates a turnaround from the period of subdued conditions previously and hints at an acceleration in GDP growth into the second quarter.

“It was encouraging to see employment conditions improve with manufacturers acquiring more headcounts due to rising new orders.

“And while the expansion in new orders and production was accompanied by rising inflation, the rates of increase in both input costs and output prices were subdued by historical standards,” she said.

Pan said the overall sentiment also stayed positive, with firms expecting higher output in the coming year.

“The level of confidence eased, which affected manufacturers’ willingness to acquire input inventories. These will be areas to monitor for further signs of a turnaround,” she added.