Latest data signalled mixed trends across the Malaysian manufacturing sector at the start of the second quarter of the year.

In a statement on Tuesday (May 2), S&P Global Market Intelligence said demand generally remained subdued, leading firms to limit production and scale back their purchasing activity, although there were some positive signs with regards to new export orders.

Also positive was the trend in employment, with firms taking on additional staff for the fourth month running.

Meanwhile, suppliers' delivery times continued to shorten and the rate of input cost inflation remained muted, enabling firms to reduce their output prices as part of efforts to stimulate demand.

That said, the index was at its joint-highest level since September last year, suggesting a tentative recovery in operating conditions since the turn of the year.

The latest PMI reading suggested that gross domestic product growth is running at a similar level to that seen in the final quarter of 2022, as well as modest year-on-year improvements in official industrial production data.

Manufacturers often noted that demand in the sector remained muted at the start of the second quarter, with some reports of customers reducing the size of their orders.

As a result, total new business moderated for the eighth consecutive month, and to a broadly similar extent to that seen in March. Demand conditions in international markets were more positive, with new export orders up fractionally following a nine-month sequence of softening.

With customer demand remaining subdued, manufacturers scaled back production, the ninth month running in which this has been the case.

That said, the moderation was only slight and the least pronounced since August 2022.

Higher workforce numbers, alongside subdued new orders, meant that firms were able to deplete backlogs of work again during the month.