KUALA LUMPUR (June 1): Manufacturing output fell for the first time in four months in May this year due to weaker client demand, IHS Markit said in its Nikkei Malaysia Manufacturing PMI report today.

The headline PMI dipped below the 50.0 no-change mark to 48.7 in May.

It noted that while the rate of contraction was overall moderate, the pace was faster than the series average, with anecdotal evidence of reduced demand backed by May's survey data with the New Orders Index posting below the 50.0 threshold.

Total new business also saw a decline, dragged down by lower new export work.

IHS Markit said lower new orders were noted in nearby Asean markets including Singapore, Thailand and Indonesia.

There were reports of lower new orders in nearby Asian economies in the latest period. Singapore, Thailand and Indonesia were among those mentioned.

Meanwhile, manufacturers were optimistic about their growth prospects, as output over the next 12 months is expected to be underpinned by higher sales, new projects and new product lines.

"That said, concerns regarding the state of the economy and client demand remained evident. Optimism was therefore lower than the average over nearly five years of data collection," IHS Markit said.