KUALA LUMPUR, May 4 (Xinhua) -- The seasonally adjusted S&P Global Malaysia Manufacturing Purchasing Managers' Index (PMI) posted a four-year high of 51.6 in April, up from 50.7 in March, as stockpiling efforts amid the Middle East war boosted production growth, S&P Global Market Intelligence said on Monday.
Though the positive PMI readings bode well for official figures on gross domestic product (GDP) and manufacturing production, anecdotal evidence suggested that at least part of the upturn in April was due to safety-stock building in response to the effects of the Middle East conflict, it said in a statement.
"Latest PMI data reveals how the war in the Middle East impacted Malaysian manufacturers during April. Stockpiling efforts drove a stronger rise in production, which was in part directed towards building holdings of finished goods," said Maryam Baluch, Economist at S&P Global Market Intelligence.
According to her, firms also reported that their clients had a similar rationale, and as a result, April saw renewed growth in new orders. Efforts by customers to build safety stocks were registered even as output price inflation hit a record high in April.
"As firms looked to protect themselves against intensifying price pressures, purchasing activity increased as firms hoped to raise their stocks of pre-production items. However, with supply-chain disruption widespread, firms continued to see stocks of inputs fall," she noted.
She also said that the sector's performance in the coming months will be partly shaped by how the situation in the Middle East unfolds. However, the latest data already highlights steps manufacturers are taking to mitigate some of the impacts. ■