Manufacturing likely to pick up in Q2
KUALA LUMPUR: The local manufacturing sector lost further momentum last month as businesses continued to scale back production, while incoming orders also moderated, said IHS Markit.
Restrictions to reduce the spread of Covid-19 cases had led to reduced demand for Malaysian manufactured goods, it said.
Despite this, manufacturers were optimistic about the yearahead outlook, with hopes that the pandemic would subside and trigger a broad recovery in demand and production.
The headline IHS Markit Malaysia Manufacturing Purchasing Managers’ Index (PMI) — a composite single-figure indicator of manufacturing performance — dipped from 48.9 in January to 47.7 last month.
This reading indicated a further moderation in the health of the manufacturing sector, although the deterioration was considerably less than that seen during the first wave of the pandemic in April last year.
“February was another tough month for manufacturers, with the pandemic continuing to affect order books adversely and disrupt supply lines and shipping,” Chris Williamson, chief business economist at IHS Markit, said in a report yesterday.
“Business conditions deteriorated at a rate not seen since last May, adding to the picture of a disappointing first quarter.”
He said that as global demand showed signs of reviving, production growth should start to pick up again in the second quarter.
“Businesses are anticipating a resurgence in demand as the impact of the pandemic eases as the year proceeds,” he said.
Production and new order volumes had weakened last month, said IHS Markit.
Though quicker than January, the deterioration rates remained softer than the peak rates of decline seen last April.