KUALA LUMPUR: Malaysia’s Manufacturing Purchasing Managers’ Index (PMI) eased to 48.6 in April from 48.8 in March, as manufacturers cut back on purchases and drew down stocks of raw materials and finished goods amid a lack of new orders, according to S&P Global Market Intelligence.
In a statement today, the global market research firm said according to its survey, demand conditions in the Malaysian manufacturing sector remained subdued in April, with production and new order inflows continuing to moderate.
"Further evidence indicates that conditions are likely to remain muted in the short- and medium-term. Firms opted to work through existing orders in the absence of new order growth while also scaling back employment, purchases, and stock holdings,” it said.
It noted that as customer demand remained weak, manufacturers had scaled back on production for the eleventh consecutive month.
The pace of contraction accelerated from March, marking the steepest decline in three months. Stocks of finished goods were further reduced as firms used existing inventories to fulfil orders, said S&P Global.
Nonetheless, Malaysian manufacturers reported only a fractional fall in employment levels, with companies reporting sufficient capacity.
Concurrently, the level of outstanding business fell again in April, to a larger extent than in the previous month, it said.
S&P Global said inflationary pressures continued to ease during the month, with the average cost burdens rising only slightly, contributing to a further marginal reduction in selling prices.
"However, this was not enough to improve confidence regarding the outlook, as the overall degree of optimism slipped to its lowest level since July 2023, with firms expressing concerns about the potential adverse impacts of a muted global economy and United States tariffs,” it added.
The S&P Global Malaysia Manufacturing PMI is compiled by S&P Global from responses to questionnaires sent to purchasing managers, involving around 400 manufacturers. - Bernama
