Manufacturers optimistic on production outlook

Firms operating in the Malaysian manufacturing sector were increasingly optimistic regarding the 12-month outlook for production.

IHS Markit said positive sentiment strengthened to the highest for five months amid hopes that the end of the pandemic would result in stable operating conditions and boost production and sales.

“Businesses continued to scale back production while incoming orders also moderated.

“Despite this, manufacturers were increasingly optimistic regarding the year-ahead outlook, with hopes that the pandemic would subside and trigger a broad recovery in demand and production,” it said.

The research firm said the headline IHS Markit Malaysia Manufacturing Purchasing Managers’ Index (PMI)

– a composite single-figure indicator of manufacturing performance dipped from 48.9 in January to 47.7 in February.

“This reading indicated a further moderation in the health of the manufacturing sector, although the deterioration was considerably less marked than that seen during the first wave of the pandemic in April 2020,” it said.

At the same time, IHS Markit said the rate of job shedding at Malaysian manufacturing firms edged towards stabilisation in the latest survey period.

“Employment levels fell only marginally in February and at a pace that was softer than the previous month,” it added.

Meanwhile expectations regarding the 12-month outlook for Asean manufacturing PMI output dipped to the lowest since last September, although goods producers remained optimistic, on balance, of higher output over the coming year.

IHS Markit said conditions across the Asean manufacturing sector deteriorated for the first time in four months during February, according to latest IHS Markit PMI data, amid renewed contractions in both factory production and order book volumes.