Malaysian factories hits first snag in four months

Recovery by Malaysia manufacturing sector could be losing momentum as output is slowing down for the first time in four months.—  Picture by K.E.Ooi
Recovery by Malaysia manufacturing sector could be losing momentum as output is slowing down for the first time in four months.— Picture by K.E.Ooi

KUALA LUMPUR, Oct 1 — Malaysia’s manufacturing output has encountered its first slowdown in four months, in a sign that the sector’s recovery could be losing its momentum.

According to IHS Markit’s Manufacturing Purchasing Managers Index (PMI), Malaysia posted a score of 49.0 in September, down from the 49.3 the country had managed the preceding month.

A PMI score under 50 denotes contraction while a score above 50 signals expansion.

IHS Markit chief business economist Chris Williamson explained that the loss of momentum was always a possibility and noted that Malaysia’s manufacturing performance was still in line with a full-year expansion.

However, he warned that this sustained recovery was contingent on the country not encountering any further disruptions due to the Covid-19 pandemic.

“Barring any further marked increases in infection rates, Covid-19 related restrictions are due to ease further in the coming months, according to IHS Markit’s Covid-19 Containment Index, which should further facilitate the manufacturing recovery,” Williamson said.

“However, the future path of the virus remains uncertain and poses the biggest risk to the outlook.”

For May, Malaysia posted a strong performance of 51.0 in the PMI, suggesting that the country was in for a V-shaped recovery.

After what appeared to be a successful containment of Covid-19, Malaysia has suddenly witnessed a steadily increasing rate of infection within the country, starting with a spike of 182 cases on September 11.

While it took from August 8 until September 16 for Malaysia to go from 9,000 to 10,000 cases, the country added the next thousand cases in just two weeks.

Health director-general Tan Sr Dr Noor Hisham Abdullah has said since that Covid-19 could no longer be considered to be restricted to Sabah as the trend of infections showed that it was already within the Malaysian community.

During the initial wave of Covid-19 infections in March, the government imposed a movement control order that brought the country’s economy to an almost complete standstill.

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