KUALA LUMPUR: MIDF Research foresees Malaysia’s economic activities to strengthen further this year, fostered by the recovery in private consumption and robust external trade.

In a research note, it noted that the IHS Markit Malaysia Manufacturing Purchasing Managers’ Index (PMI) – a composite single-figure indicator of manufacturing performance – rose to 52.8 in December 2021 from 52.3 in November.

“On the business outlook, firms remain optimistic on hopes that the Covid-19 pandemic will eventually end and supply chain constraints to improve as more economies resume operations,” said MIDF Research.

It said Malaysia’s manufacturing activities accelerated in December 2021, expanding for the third consecutive month following the economic reopening and the easing of the Covid-19 curbs, Bernama reported.

This led to new orders, while output rose at a faster pace too during the month.

Additionally, new export orders rebounded in line with the strong outbound shipments of electrical and electronics and refined petroleum products, among others.

“Given the prolonged supply disruptions and high logistic prices, input prices sustained an upward trend, which consequently resulted in output costs increasing at the fastest pace since April 2021,” it said.

Nevertheless, the research house noted that the near-term production outlook could be hampered by elevated production prices, raw material shortages and concerns that export performance may soften in light of the uptick in Covid-19 cases in major economies.