Positive outlook for manufacturing sector in 2H2018
KUALA LUMPUR: The manufacturing sector’s business outlook for the second half (H2) of 2018 is positive, but caution remains amid the balance of risks in the global economy tilting towards the downside, according to a survey by the Federation of Malaysian Manufacturers (FMM).
FMM President Datuk Soh Thian Lai said the expectations were looking up for business conditions, sales production volume and cost, as well as capacity utilisation.
Additionally, hiring was expected to remain stable for the rest of the year, likely due to anticipation that the minimum wage was set to be adjusted higher soon, he told reporters after releasing the FMM-MIER Business Conditions Survey for the first half of 2018.
“The sector is cautiously bracing for better times ahead on expectations that more certainty in policy directions from the new government will unfold in Budget 2019 announcement for businesses and the economy going forward,” he added.
Soh said both domestic and external demand were expected to boost sales in the coming months while production volume was set to rise in anticipation of a pick-up in sales.
The manufacturing sector slowed down in the first six months of the year as production volume and capacity utilisation moderated in line with lower sales, both locally and abroad, while the cost of production was also lower.
Recent recruitment for the period was less active than last year.
Manufacturing costs are lower recently, in line with zero-rated Goods and Services Tax.
“Cost in the first half of 2018 was higher for 58 per cent of the respondents, down from 70 per cent in the second half of 2017 and 72 per cent in the first half of 2017,” said Soh.
In the next 12 months, respondents would implement various strategies to improve their competitiveness, particularly in the areas of marketing and sales, human resource and operations, said Soh.
The semi- annual survey, conducted in collaboration with the Malaysian Institute of Economic Research (MIER), was carried out from June 6 to July 23, 2018 involving 434 respondents nationwide. — Bernama