Manufacturers remain upbeat on growth

KUALA LUMPUR: Malaysian manufacturers remained upbeat about prospects for the rest of the year, despite underlying weakness in client demand as shown by the headline Nikkei Malaysia Manufacturing Purchasing Managers’ Index (PMI).

June PMI fell to 46.9 from 48.7 in May, which was the lowest in the survey’s five-year history.

However, on the price front, cost pressures eased to the weakest in eight months, according to the report.

The report, released by IHS Markit, noted that the latest reading also meant that business conditions deteriorated across the second quarter as a whole.

IHS Markit senior economist, Paul Smith said Malaysia’s Manufacturing PMI fell to a record low in June, just two months after signalling growth in April, due to sharper falls in output and new work, which

With underlying demand worsening, goods producers took steps to limit workforce growth and streamline inventories – employment stagnated and stocks of purchases fell at a survey-record rate. Paul Smith, IHS Markit senior economist

were the main factors behind the sector’s plight.

“With underlying demand worsening, goods producers took steps to limit workforce growth and streamline inventories – employment stagnated and stocks of purchases fell at a survey-record rate.

“However, the firms’ optimism was undeterred, with sentiment instead improving since May. A number of panellists predicted a turnaround in client demand,” he said.

Both output and new orders decreased solidly in June while production fell at the fastest rate since June 2016, while the rate of decline in new work accelerated to the most marked since the end of last year.

There were reports of a downturn in client demand and an economic slowdown in the latest period.

The fall in total new business was marginally offset by higher exports in June, which saw new orders from abroad rise for the second time in three months, albeit only modestly.

“Panellists mentioned incoming new work from fellow Asian economies including China, Vietnam and India,” it added. — Bernama

Malaysia’s Manufacturing PMI fell to a record low in June, just two months after signalling growth in April, due to sharper falls in output and new work, which were the main factors behind the sector’s plight.