April PMI plunges to 31.3 as firms trim, halt production
KUALA LUMPUR: The manufacturing sector came under heavy pressure last month as measures to tackle the spread of Covid-19 caused firms to either suspend production or operate below capacity.
The headline IHS Markit Malaysia Manufacturing Purchasing Managers’ Index (PMI), a composite single-figure indicator of manufacturing performance, stood at 31.3 last month.
This was down from 48.4 in March, pointing to a sharp decline in business conditions that was by far the strongest since data collection began in 2012.
IHS Markit chief business economist Chris Williamson said it was no surprise to see that measures taken to contain the Covid19 pandemic had led to a sharp fall in manufacturing activity last month.
However, he said it was reassuring to see only a modest fall in employment as the vast majority of firms held on to their staff to safeguard longer-term production capacity.
Williamson said business expectations for the year ahead had also ticked higher, as more companies saw prospects improving.
“In that respect, with an increasing number of governments looking at ways to ease Covid-19 restrictions, it is likely that we will soon see the rate of export decline moderate, helping drive a recovery in production.
“A recovery is, nevertheless, likely to be sluggish, as global demand looks set to remain relatively subdued for some time,” he said in a report yesterday.
IHS Markit also said new orders had fallen sharply last month.
Some companies indicated that key clients had shut down.
The latest data also signalled a substantial and survey-record decline in export demand last month, with 83 per cent of companies reporting lower orders from abroad.
Supply chain delays also impeded manufacturers, with firms recording the sharpest month-tomonth lengthening in delivery times since data collection started almost eight years ago.
IHS Markit said there were signs of stabilisation in business expectations for the next 12 months.
“Sentiment edged up into positive territory as companies anticipate an economic recovery over the course of the year.”