Manufacturing index falls to post-June low

PETALING JAYA: The headline Nikkei Malaysia Manufacturing Purchasing Managers’ Index (PMI) came in at 47.2 in October, down from 48.6 in September, signalling worsening operating conditions in Malaysia’s goods-producing sector.

In fact, the latest reading was the lowest since June and below the long-run series average of 49.5.

Contributing to the overall decline in manufacturing conditions, production decreased for the 19th consecutive month. Moreover, the rate of contraction was sharper than the historical average.

According to panellists, challenging economic conditions and a fall in demand led to a drop in output.

New orders decreased at the sharpest rate in 11 months during October. Firms linked a fall in total sales to uncertainty in the market. Data also suggested that a decline in international demand contributed to the overall decrease in incoming new orders.

Reflecting worsening operating conditions, manufacturers cut back on buying activity.

Furthermore, the rate of decline was the quickest since June. Subsequently, inventories of preproduction items were depleted at the sharpest pace in 14 months.

Due to a sharp fall in new orders, firms were able to clear levels of unfinished work for the first time in four months during October. Suppliers were also able to meet delivery schedules, as lead times shortened for the tenth successive month.