“But this is a far cry from raising fears that Malaysia is about to enter into a recession,” he said.

In a statement debunking severe economic threats to Malaysia, Ong said recent numbers, like the purchasing manager’s index (PMI) for December which fell to the lowest on record, should be juxtaposed against other data that showed the manufacturing sector was performing well.

Even though the PMI hit 46.8 for December, the lowest since records were kept from 2012, data from the PMI readings in the first half of 2018, which showed a declining trend, did not affect manufacturing output and the value to the Malaysian economy.

“Indeed, the overall trend in the value of manufacturing sales in Malaysia showed a healthy increase from RM67.8bil in January 2018 to RM73.1bil in October 2018, which is an increase of 7.8%,” he said.

“There was no significant slowdown in manufacturing sales in 2018 despite the drop in the PMI for four consecutive months from January to May 2018.”

Ong said when the PMI was declining – employment – a baramoter of economic health continued to grow steadily from 14.67 million in January 2018 to 14.94 million in October 2018, an increase of 1.8%. Furthermore, unemployment remained steady at 3.3% during this period.

He pointed out that total trade figures also continued to grow in 2018 compared with 2017, saying that total trade for each month in 2018 was higher than the corresponding month in 2017, with the exception of February 2018.

Exports for each month in 2018 was also higher than the corresponding month in 2017 except for August 2018.

“Total trade (January to November 2018) has increased to RM1.72 trillion from RM1.62 trillion over the same time period in 2017, an increase of 6.2% (which is higher than the initial target of 5.0% growth set in early 2018).

“Total exports (January to November 2018) has increased to RM914bil from RM855bil over the same time period in 2017, an increase of 6.9%.

“Total balance of trade surplus (January to November 2018) has increased to RM109.6bil compared with RM91.1bil during the same time period in 2017, an increase of 20.2%,” he said.

Ong said a slowdown in manufacturing growth might be imminent but the degree of the slowdown should be manageable, especially with the RM37bil indirect stimulus via the goods and services tax and income tax refunds which should boost domestic consumption and investment.

“Most importantly, the figures do not show that Malaysia is heading towards a contraction in economic output anytime soon,” he said.

Ong said the decline in GDP growth in the second quarter was down to the weakness in the commodity sector. That continued into the third quarter and caused full-year growth forecast to be cut to 5% from the earlier estimate of between 5.5% to 6%.

“It is important to note that the GDP figures for the manufacturing and services sector, which comprises almost 80% of the economy, are still registering healthy growth in all three quarters of 2018.

“Whether the mining and quarrying sector can recover in the fourth quarter of 2018 and beyond remains to be seen. Production in Petronas’ operations in the Kebabangan gas fields, which were disrupted in the second and third quarters of 2018, is expected to be fully-revived only in August 2019,” he said.

Ong said the recovery in the Industrial Production Index (IPI) for the mining sector in October 2018 to 105.3 looked encouraging especially after dipping below 100 from June to September 2018.

“Most analysts are also forecasting a recovery in gas production, especially in Sabah, if not in fourth quarter of 2018 then definitely in 2019. The IPI figures for November 2018 and for December 2018 and the fourth quarter 2018 GDP figures must be closely monitored to see if the numbers of the mining and quarrying sector will rebound,” he said.