PETALING JAYA, March 1 — The manufacturing sector had stagnated in the month of February after an expansion at the onset of 2018, the Nikkei Malaysia Manufacturing Purchasing Managers’ Index (PMI) report published today said.
The report indicated a slight decline in new orders coupled with weak demand, which saw the PMI scoring 49.9 in February, compared to 50.5 in January.
The sector, however, showed a hike in output as it rose for seventh straight month in February albeit at a small rate, due to improved economic conditions.
Commenting on the PMI, Aashna Dodhia, economist at analyst firm IHS Markit that compiled the report, said the manufacturing sector saw a slight dip in demand for February.
“February data painted a mixed picture as manufacturing conditions stagnated across Malaysia. Output growth was accompanied by greater payroll numbers across the sector, but demand for Malaysian-produced goods at both home and from international markets fell slightly.
“On the price front, higher input costs placed further pressure on firms’ margins as they were restricted in their ability to fully pass on higher cost burdens to price-sensitive clients,” she said in the report.
The report which surveys over 450 industrial companies, cited that some of the respondents said the reduced demand is from key export markets like Europe and the United States.
Malaysian firms faced higher production cost compared to last January and the previous 15 month due to weak currency exchange relative to the US dollar, the report added.
This led to a rise in output prices the 16th straight month, although at the slowest pace compared to the last four months.
Purchases for manufacturing materials also tumbled for three straight months, due to falling demand.
However, the report said manufacturers remained optimistic towards the 12-month outlook for input goods due to the expected improvement in underlying demands.
