Malaysia’s manufacturing conditions remained weak in March 2016, albeit at a slower pace, according to the Nikkei Malaysia Manufacturing Purchasing Managers’ Index (PMI).
In a report last Friday, Markit, a global diversified provider of financial information services, said the headline PMI stood at 48.4 in March, up from 47.8 in February, signalling a softer deterioration in operating conditions at Malaysian manufacturers.
It said production contracted at a rate little-changed from February’s three-month record, subsequently leading to a further fall in input buying.
“As well as a reduction in sales, firms also mentioned the weak currency against the US dollar driving up prices as contributing to the fall in buying volumes,” the report noted.
Nonetheless, owing to an increase in global demand, new orders declined at the weakest rate since May last year.
“Data suggested that an increase in international demand helped to soften the overall fall in total new work intakes, as new export orders rose for the second month running,” the report said.
At the same time, employment growth also resumed during the month, although only marginally, possibly highlighting manufacturers’ confidence in the future outlook.
On the price front, inflationary pressure on input prices eased to an eight-month low, which led to a weaker increase in charges.
The PMI is based on data compiled from monthly replies to questionnaires sent to purchasing executives in around 450 manufacturing companies. It is derived from indicators for new orders, output, employment, suppliers’ delivery times and stocks of purchases. Any figure greater than 50.0 indicates overall improvement of sector operating conditions.
-The Sun Daily