KUALA LUMPUR — Business and consumer activity in South-East Asia’s third-wealthiest economy is inching back towards pre-pandemic levels, going by data published almost a month after the end of a strictly-enforced lockdown.
Monday’s IHS Markit Purchasing Managers’ Index (PMI), a widely cited survey of businesses, showed manufacturing rising in May after a record low in April, when Malaysia was in lockdown.
According to IHS Markit, the May rebound in business activity came “amid reports that some firms had restarted production following a partial lifting of lockdown rules.”
However, the PMI survey showed the May bounce-back as “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.
An early March spike in coronavirus cases saw Malaysians confined to their homes from March 18, unless shopping for groceries or seeking medical treatment.
Most businesses were forced to close, with only “essential” services operating. Over 23,000 people were arrested for alleged breaches of the lockdown.
On May 4, 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.
However, data gathered by Apple and Google suggests Malaysians are only slowly resuming pre-lockdown activities.
By the end of May, Apple Maps users were driving 15 per cent less than before the lockdown – during which levels dropped to 70 per cent below usual.
Google data show “retail and recreation” trips down 54 per cent in late May compared with before lockdown – during which falls of 80 per cent were recorded.
Trips to parks and public transport stations remain down, while the use of maps in “residential” settings is almost 30 per cent higher than usual.
Apple and Google say the data will be available only “for a limited time” during the pandemic – which has killed more than 370,000 people worldwide, according to official data collated by Johns Hopkins University.
Malaysia has reported nearly 8,000 coronavirus cases and 115 related deaths. Some businesses – such as barbershops, gyms and pubs – cannot reopen until at least June 9 and people need police permission to travel from one of the country’s 13 states to another.
Malaysians cannot travel abroad, and tourists cannot enter – undermining a sector worth around 10 per cent of gross domestic product. Malaysia’s trade-dependent economy has also been hard hit by lockdowns elsewhere, some of which remain in place and have undermined 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, the value of Malaysia’s trade exceeds GDP, with exports such as electronics, gas and palm oil all key drivers of the country’s economy.
Malaysia’s Central Bank has warned that the country’s economy could contract by 2 per cent in 2020, though economists at Deutsche Bank suggest a milder contraction of 1 per cent could be possible.Show