• Malaysia manufacturing sector tumbles in March

• Covid-19 outbreak continue to cause disruptions across global manufacturing sector

• US manufacturers see biggest plunge in new orders and employment

• Eurozone manufacturing shrinks on Covid-19 outbreak

• UK manufacturing activity contracts in March

• China’s manufacturing recorded dramatic surge in March PMIs

• Japan’s manufacturing downturn deepened in March

• ASEAN manufacturing PMI plunges to the lowest

Malaysia manufacturing sector tumbles in March

Malaysia's manufacturing PMI fell to 48.4 in March, from 48.5 in February. The survey's output index fell to its lowest level since June 2016 during March, signalling a sharp slowdown in manufacturing production in Malaysia. According to firms, demand- and supply-side factors adversely impacted output volumes. As a result, Malaysia's manufacturing sector cut production volumes during March in response to Covid-19, as the global pandemic cut demand and restricted operating capacities due to severely delayed deliveries of inputs. Latest survey data pointed to the sharpest decrease in new order intakes since data collection began in July 2012. Public health measures aimed at curbing the spread of Covid-19 led to a fall in demand. The global pandemic also had a noticeable impact on external markets, as evidenced by a sharp drop in export demand during March. The rate of decline was broadly in line with that seen in February following the initial negative shock to demand from China. Supply-side hindrances also restricted production schedules in March. Supplier delivery times lengthened at an accelerated rate that was by far the most severe on record. Looking towards business prospects over the next 12 months, Malaysian manufacturers expect further cuts in production. Concerns that the global Covid-19 pandemic would have a long-lasting damage resulted in sentiment falling to its lowest level since the January 2016. The negative outlook was also linked to the prospect of sustained supply chain disruption.

Source: BIMB Securities Research - 2 Apr 2020