KUALA LUMPUR: The overall demand conditions across the manufacturing sector remained muted at the end of 2023, leading firms to scale back production amid limited new order inflows, said S&P Global.
The seasonally adjusted S&P Global Malaysia Manufacturing Purchasing Managers’ Index (PMI) was unchanged at 47.9 in December, indicating that business conditions remained challenging for manufacturing firms.
S&P Global Market Intelligence economist Usamah Bhatti said despite the latest PMI data suggesting demand remained subdued, the data are still consistent with modest growth in the official statistics.
"That said, evidence is pointing to demand conditions staying muted in the coming months, given the sustained moderations in production and new business inflows.
"There was also evidence that firms increasingly utilised existing stocks of finished items to complete orders," he said in a statement today.
On the positive side, input prices rose at a softer pace for the first time in three months in December, which contributed to a modest increase in output charges.
"As such, price increases were less pronounced than the respective series averages," he added.
S&P Global said in line with the trend for output and new orders, purchasing activities continued to be scaled back as the muted picture for new business deterred firms from buying additional inputs.
In turn, stocks of purchases also decreased, albeit at a softest pace since July.
Meanwhile, it said hopes that new orders will return to growth supported confidence that production will rise over the coming 12 months.
"That said, the current subdued demand environment means that the degree of optimism has remained broadly stable since September, amid concerns regarding the pace and timing of a recovery," it added. - Bernama
