Manufacturing PMI down again

> Production fell for the first time in eight months despite a marginal contraction rate

PETALING JAYA: Malaysia’s manufacturing sector continued to deteriorate in March as the headline Nikkei Malaysia Manufacturing Purchasing Managers’ Index (PMI) fell to 49.5 from 49.9 in February, in line with a marginal deterioration in operating conditions.

March data pointed to a deterioration in conditions in the Malaysian manufacturing sector at the end of the first quarter, according to IHS Markit, which compiles the survey.

It highlighted that production fell for the first time in eight months despite a marginal contraction rate.

“The poor performance in the sector was also driven by a decline in new business placed at Malaysian manufacturing firms.”

Meanwhile, new orders continued to decline in March as firms continued to decrease their purchasing activity and preproduction inventories, reflecting poor demand conditions.

Amid reports of lower demand from international markets, new export orders declined for the second consecutive month in March. The rate of contraction accelerated since February but remained modest.

IHS Markit economist Aashna Dodhia commented that Malaysia’s manufacturing sector ended Q1 2018 on a slightly weaker footing, with business sentiment easing to the weakest since last December, reflecting some concerns towards the 12-month outlook for output.

“A downbeat mood was also reflected with jobs growth slowing to the weakest in the current period of staff recruitment.”

She also said the New Export Orders Index registered at a 15-month low, highlighting falling demand for Malaysian goods from international markets.

“Price pressures continued to escalate, with both input and output prices rising at faster rates. However, firms’ margins remained under pressure as they continued to face limited pricing power.”