KUALA LUMPUR: The Nikkei Malaysia Manufacturing Purchasing Managers’ Index (PMI) results provide a rosy outlook on the Malaysian economy this year, particularly on the performance of the industrial production and external trade sectors, MIDF Research said.
Strengthened external demand and an increase in new export orders were key drivers for last month’s manufacturing indicator, which reflects firm recovery momentum in global economic activity, it added.
Malaysia last month posted its first net improvement in manufacturing operating conditions since March 2015, supported by higher output and growth in new export orders, according to a poll by Nikkei.
Nikkei and survey compiler IHT Markit said in a statement that the headline PMI rose above 50 for the first time in two years to 50.7 in April (March: 49.5).
The International Monetary Fund (IMF) recently revised its global growth forecast for 2017 upwards, from 3.4 per cent to 3.5 per cent.
MIDF Research said expected strong growth in major economies and gradual recovery in commodity prices are factors in the upward revision.
“For Malaysia, we opine that firmer global growth will translate into higher demand for our exported goods and a boost for export-oriented industries,” it added.
The firm maintained its growth forecast for Malaysia’s exports and industrial production at 8.5 per cent and 5.3 per cent respectively this year.