The Purchasing Managers' Index (PMI) in Malaysia will likely stay below the 50 mark, dividing growth from contraction in the near term, echoing the global manufacturing PMI.

This is, according to Public Investment Bank research (PublicInvest), due to the ongoing interplay of fundamental factors that mirror fragile external demand.

"We anticipate this trend to persist before potentially bottoming out in the latter part of the first half of 2024 (1H24)," PublicInvest said in a note.

Last month, Malaysia's manufacturing PMI remained steady at 47.9.

The recent PMI figures indicate that GDP growth in Malaysia is maintaining a similar momentum to growth recorded in Q2 and Q3 last year, according to S&P Global.

Furthermore, the World Semiconductor Trade Statistics (WSTS) forecasts a strong recovery in global semiconductor sales this year, which are now forecast at a growth rate of 13.1%, a rise from the prior forecast of 11.8%, Business Times reports.

This predicted growth highlights a possible key moment for the manufacturing sector in Malaysia as well as the global semiconductor industry, the WSTS stated.

In addition, Malaysia's Ministry of Finance forecasts 5.5% growth in exports of manufactured goods this year, according to PublicInvest, further bolstering the positive outlook.

"We expect Malaysia's exports of goods and services to rebound to a positive growth of 5.4% in 2024.

"However, sustained downside risks persist, including the potential for prolonged tightening of financial and monetary conditions, continued drag on China's economy from the property sector, and ongoing trade tensions between the US and China, alongside geopolitical tensions in the Middle East," it went on to add.