The beginning of the 2nd quarter of 2022 for the Malaysian manufacturing sector is seen to have a tremendous growth momentum.
According to S&P Global, despite weak production, incoming orders remained strong with the highest record since April 2014 amid rising customer confidence.
In addition, demand was seen to increase even as manufacturers had to reduce their workforce due to international restrictions that prevented companies from hiring workers from abroad.
On the other hand, traders cited concerns of continued price and supply pressures as factors limiting operations, material shortages and delivery delays.
According to S&P Global, this played a role in the firm's expectations regarding future production, which fell to its lowest level since last August.
Meanwhile, Malaysia's seasonally adjusted S&P Global Manufacturing Purchasing Managers' Index was seen rising from 49.6 in March to 51.6 in April, indicating a new improvement in the health of the sector.
Clearly, the latest readings represent continued expansion in manufacturing output and GDP, although the survey suggests that growth is once again held back by ongoing supply chain issues.
The firm added that the increase in key figures was led by a sharp recovery in new order volumes, with new business growth hitting an 8 -year high.
The firm also noted stronger customer confidence had boosted demand in the domestic and external markets, with new export sales returning to expansion territory for the 2nd time in 3 months.
Meanwhile, S&P Global Chief Business Economist Chris Williamson said April saw a good surge in demand for manufactured goods with manufacturers reporting the highest inflow of new orders in 8 years.
It also reflects a combination of increased sales at home and abroad.
Nevertheless, supply constraints in terms of the availability of labor and components remain a major obstacle to economic recovery.
This means that manufacturers and suppliers are once again unable to meet demand on average, which in turn puts constant upward pressure on prices.
