• Malaysia manufacturing activity slips further in October
• Global manufacturing output and new orders accelerate at start of fourth quarter
• US manufacturing activity speed up in October
• Eurozone manufacturing growth continues to strengthen in October
• UK manufacturing upturn continues despite further loss of growth momentum
• China’s manufacturing sector expands further in October as pandemic fallout fades
• Japan manufacturing sector moves closer to stabilisation in October
• Asia manufacturing sector seeing a sluggish start to the fourth quarter

Malaysia manufacturing activity slips further in October

The manufacturing sector in Malaysia continued to contract, and at a faster pace as the IHS Markit Malaysia manufacturing PMI dipped for the fourth successive month in October, down to 48.5 from 49.0 in September. Both new orders and production moderated in October, and to greater extents than in September. The extension and reintroduction of restrictions to prevent the spread of COVID-19 was reportedly a key factor behind worsening market demand and a scaling back of production. New export orders also fell, and to a greater extent than total new business amid ongoing disruption to international demand caused by the pandemic. Weaker new order inflows meant that firms were able to deplete their backlogs of work. The resulting reduction in outstanding business was the sharpest since December 2018. A lack of pressure on capacity resulted in a further fall in employment, although the rate of job cuts continued to soften from August's survey record. The rate of output price inflation also softened, and was only marginal, as efforts to pass on higher input costs to customers were undermined by the offering of discounts to try to secure new orders. Charges have risen modestly during the past five months. Although manufacturers remained confident that output will increase over the coming year, optimism fell sharply from September's nine-month high amid rising COVID-19 case numbers and the extension of restrictions.

Source: BIMB Securities Research - 3 Nov 2020