KUALA LUMPUR, July 2 (Xinhua) -- Economists have foreseen Malaysia's manufacturing sector to continue to recover despite the seasonally adjusted S&P Global Malaysia Manufacturing Purchasing Managers' Index (PMI) down 49.9 in June.
Kenanga Research said in a note that it sees buoyant trade and investment performance to accelerate Malaysia's manufacturing sector recovery.
The research house expects a significant expansion in the manufacturing sector, backed by resilient domestic demand coupled with the robust foreign direct investments to Malaysia which were largely influenced by Malaysia's favorable investment policies for foreign investors.
It also noted that the buoyant labor market which will be driven by the upcoming implementation of the progressive wage policy will further improve the labor productivity, and could become an additional support for the recovery in the manufacturing sector.
Additionally, it believes that the improvement in the global semiconductor industry, rooted by computing needs and technology upcycle coupled with China's economic recovery, will further benefit Malaysia.
Meanwhile, MIDF Research said in a note that it remained optimistic on Malaysia's external trade performance in the second half among others due to better oversea sales of manufactured goods, including electrical and electronic (E&E) products, refined petroleum, chemicals, and machinery and equipment.
Additionally, the research house foresees a steady expansion in palm oil and mining exports, supported by encouraging global commodity prices.
"Consequently, we reaffirm our expectation for goods exports to rebound and grow by 5.2 percent in 2024," it said.
TA Securities also said in a note that the average reading for the second quarter of the year was the highest since the third quarter of 2022, indicating a potential improvement in economic growth over this period.
According to the research house, the data also suggests that the recent solid expansion, as indicated by official manufacturing production data, has continued beyond April.
"Looking ahead, sustained growth in new orders is expected over the coming year, bolstering optimism for the outlook of manufacturing production," TA said. ■