• Malaysia’s manufacturing declines for fifth consecutive month

• Global manufacturing PMI at 32-month month low

• US manufacturing growth hit by global slowdown

• Eurozone manufacturing activities shrink for first time since 2013

• UK manufacturing activities hit by Brexit uncertainty

• China manufacturing activities continue to sink

• Japan PMI dips into contraction territory

• ASEAN manufacturing PMI shows deteriorating conditions

Malaysia’s manufacturing declines for fifth consecutive month

Malaysia’s manufacturing sector downturn continued in February for the fifth consecutive month, with persistent declines in both output and new orders. Nikkei’s manufacturing PMI recorded 47.6 in February, down from 47.9 in January, thereby pointing to a sharper deterioration in manufacturing sector business conditions. Intakes of new work fell during February, with firms attributing this to a general market slowdown causing existing client demand to decline. The decrease was marked overall and among the strongest seen across the near seven-year survey history. New orders from international sources were also down in February. Asian markets were cited as a drag on export sales. As a result, production volumes were cut for a fifth successive month. The rate of decrease was only moderate, but accelerated amid some reports of factory shutdowns. Employment remained flat, with staffing levels unchanged from January. With lower production requirements, input purchasing was decreased at the second-fastest rate since June 2017 and at a marked rate overall. This filtered through to inventories, with stocks of purchases declining at one of the strongest rates. Malaysian manufacturers also scaled back their holdings of finished items. Nevertheless, expectations towards output over the coming 12 months remained positive despite dipping since January.

Source: BIMB Securities Research - 4 Mar 2019