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Output in Malaysian manufacturing was reported to have fallen for the first time in four months in May. — File picOutput in Malaysian manufacturing was reported to have fallen for the first time in four months in May. — File picKUALA LUMPUR, June 1 – Malaysia’s manufacturing sector contracted in May after it experienced a good run in the first four months of 2017, a report by Nikkei Malaysia said today.

According to the report, the Nikkei Malaysia Purchasing Managers’ Index (PMI) for the country’s manufacturing sector dipped below the 50.0 to 48.7 in May, signalling a renewed deterioration.

In April, the PMI score was 50.7, which was a marginal improvement for the first time in two year. Figures greater than 50.0 show overall improvement of operating conditions in the manufacturing sector.

While output, new orders and purchasing activity contracted, the only positive outcome from this scenario, the report said, came from the employment segment, which showed more job creation for the first time since January.

“Employment rose for the first time in four months and firms remained optimistic towards the 12-month outlook. The degree of positive sentiment was relatively muted, however,” IHS Markit senior economist Paul Smith said in the report today.

Because output fell for the first time in four months in May, the report said the rate of contraction was faster than the series average.

It said panelists linked the lower production to weaker client demand, thus, noting that the latest fall marked a resumption of the trend seen for more than two years prior to April’s fractional expansion.

However, in looking ahead, the report said manufacturers were optimistic about their growth prospects as higher sales, new projects and new product lines were expected to underpin output over the next 12 months.

However, the report pointed that optimism was rather lower than average because of concerns on the state of the economy coupled with other market driven aspects.

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