Malaysian manufacturing PMI falls to 49.7 in August ’24
Malaysian manufacturing sector experienced a slight decline in August 2024, as per the S&P Global Malaysia Manufacturing Purchasing Managers’ Index (PMI) which stayed at 49.7, signalling a small decrease in operating conditions.
The latest PMI data indicates that GDP growth is similar to the second quarter, with modest year-on-year improvements in manufacturing production. Manufacturers reported muted demand in August due to weak customer confidence.
“The latest PMI data suggested that demand conditions in the Malaysian manufacturing sector remained subdued midway through the third quarter of 2024, as production and new order inflows moderated at a marginal rate. That said, the data are still consistent with the GDP growth seen in the second quarter of the year continuing.” Usamah Bhatti, Economist at S&P Global Market Intelligence, said.
Total new business slightly decreased for the second consecutive month. International market demand improved for the fifth month but at a slower rate.
Manufacturers reduced production for the third month in a row, with the strongest moderation in four months. Finished goods stocks were depleted further as firms used existing stocks to meet orders.
Employment levels fell marginally for the second consecutive month as firms adjusted to weaker business conditions. Backlogged work also declined, indicating sufficient capacity.
Input costs continued to rise, driven by higher raw material prices, leading firms to increase their output charges for the fifth consecutive month.
Purchasing activity was scaled back due to muted new business, resulting in a decline in input stocks. Vendor performance also deteriorated, with longer lead times and delivery delays contributing to the slowdown.
Despite the challenges, manufacturers remain cautiously optimistic about future growth, expecting an increase in production and new orders over the next 12 months.
Attribution: S&P Global Malaysia Manufacturing PMI report
Subediting: Y.Yasser
