Local manufacturing deteriorates further

> Conditions worsen for third month in a row in April as new orders fall at faster pace

PETALING JAYA: Malaysian manufacturing conditions deteriorated for the third successive month in April due to faster declines in output and new orders.

The Nikkei Malaysia Manufacturing Purchasing Managers’ Index (PMI) fell to 48.6 in April from 49.5 in March, an IHS Markit survey showed.

The Nikkei Malaysia Manufacturing PMI is based on data compiled from monthly replies to questionnaires sent to purchasing executives in over 450 industrial companies.

IHS Markit economist Aashna Dodhia said the health of the manufacturing economy deteriorated at the strongest pace since October 2017 in April, reflecting lacklustre demand from domestic and international markets.

“Subsequently, total new orders and new export orders contracted at the fastest rates since July 2017 and December 2016 respectively.”

She noted that the recent buildup of inflationary pressures faced by manufacturers softened in April, with input cost inflation broadly in line with the historical average. However, output charge inflation was solid and the fastest since last September.

Aashna said on the bright side, business sentiment towards the 12month outlook for output was at the strongest level since October 2013.

“As firms were upbeat about their prospects, firms continued to expand capacity by raising their payroll numbers.”

Reflecting weak demand conditions, purchasing activity fell across Malaysia’s manufacturing sector for the fifth successive month during April. The contraction quickened to a solid pace that was the fastest since the end of 2017. Subsequently, both pre- and post-production inventories fell over the latest survey period.