Kuala Lumpur, Almost one month after Malaysia ended a seven-week lockdown, business activity in South-East Asia’s third-wealthiest economy is getting back on track, but still languishing below pre-pandemic levels.
The IHS Markit Purchasing Managers’ Index (PMI), a widely cited survey of businesses published Monday, showed manufacturing rose in May after a record low in April – a month of strictly-imposed lockdown that saw people confined to their homes and most businesses forced to close.
With new coronavirus case numbers falling and the economy losing the equivalent of half a billion dollars a day, according to government estimates, Malaysia allowed most businesses to reopen on May 4 after seven weeks of only “essential” services operating, according to Deutsche press agency (dpa).
According to IHS Markit, May’s rebound in business activity came “amid reports that some firms had restarted production following a partial lifting of lockdown rules.”
However, the survey said the bounce-back was “indicative of a further deterioration in manufacturing sector conditions” as overall performance remained below the 50 mark, which Malaysia last hit in January. If the PMI reads below 50, it suggests businesses are cutting back.
Malaysia’s trade-dependent economy has also been hard hit by lockdowns elsewhere, some of which remain in place and have reduced demand for Malaysian goods.
IHS Markit said that “ongoing measures both domestically and overseas to stem the spread of the coronavirus” are holding back exports.
According to World Bank data, Malaysia’s trade exceeds the country’s gross domestic product, with exports such as electronics, gas and palm oil key drivers of the country’s economy.
Source: Bahrain News Agency