PETALING JAYA: Malaysian manufacturers have paused hiring in May after two months of job creation amid subdued production demands, S&P Global reveals.
It said layoffs, resignations and labour sourcing challenges had offset the gains from the expansion of payrolls by some firms.
“The respective seasonally adjusted index dipped fractionally below the crucial mark of 50, signalling broadly unchanged staffing levels.”
S&P Global released the manufacturing Purchasing Managers’ Index for the month of May yesterday, which highlighted the drop in reading to 49.9 from April’s recent high of 51.6.
Following two consecutive months of improvement in the health of the Malaysian manufacturing sector, the latest headline reading signalled a slight moderation of business conditions.
According to S&P Global, the drop in the headline index reflected a weakness in underlying demand conditions, with firms noting that recent price hikes for goods had dampened sales growth.
As a result, manufacturers registered a renewed moderation in total new orders.
“Additionally, companies faced challenges in securing new business from abroad, as new export orders softened for a third month running and at the strongest rate since last October.
“Production levels across Malaysia moderated slightly in the latest survey period. The softening in output followed two consecutive months of increases,” it said.
On a more positive note, S&P Global said confidence ticked up for the first time in four months. With new orders easing, manufacturers were able to utilise available spare capacity to work through outstanding business. The rate of depletion was modest, however.
Meanwhile, input costs continued to increase sharply, but the pace of inflation of selling prices eased notably from April’s series high as manufacturers sought to remain competitive.
Maryam Baluch, economist at S&P Global Market Intelligence, said sluggish demand conditions in the sector led to a moderation in operating conditions, as output and new orders eased following growth in April.
