KUALA LUMPUR, Oct 1 — Activity in Malaysia’s manufacturing sector continued to worsen last month towards the end of the third quarter, resulting in it registering the worst ever quarterly average ever recorded in the history of the Nikkei Malaysia Manufacturing Purchasing Managers’ Index (PMI).
The headline PMI increased slightly to 48.3 last month from 47.2 in August, which had been the lowest reading since October 2012.
Any figure greater than 50 on the index, which measures manufacturing performance, shows an overall improvement of sector operating conditions.
“Despite production, new orders, purchasing activity and stocks of pre-production goods all contracting at slower rates than in August, the rates of decline were still solid overall,” said the PMI released today.
According to the PMI, challenging economic conditions and a lack of sales led to the decline in production last month.
“Despite slowing, the rate of decrease was faster than the long-run series average,” the survey said.
New orders continued to fall, contracting for the seventh month in a row during September, and data suggested that this was caused primarily by the domestic market as international demand had increased.
Higher taxes and the ringgit plunge led to further hikes in purchasing prices, with the PMI describing the rate of inflation as “marked”, despite easing from August’s 21-month high.
“Subsequently, charges rose as goods producers tried to pass on their higher cost burdens to clients,” said the PMI.
The only bright spots in the survey were a “fractional” increase in new export orders and a “modest” gain in employment.
The PMI, which measures manufacturing performance, is based on indicators for new orders, output, employment, suppliers’ delivery times and stocks of purchases.
