The sales value of the manufacturing sector returned to positive growth of 3.3% YoY, reaching RM146.8bn in May, after recording a decline of 2.0% in the preceding month. The expansion was bolstered by the strong growth of 17.3% (Apr: -4.9%) registered in transport equipment & other manufactures coupled with the continuously increasing trend in non-metallic mineral products, basic metal & fabricated metal products (May: 8.7%; Apr: 4.1%); and electrical & electronics products (May: 8.2%; Apr: 4.0%).
On a month-on-month comparison, the sales value expanded 1.3% as against a negative 7.2% recorded in April while seasonally adjusted sales value rose 5.5%.
The sales value of export-oriented industries which represented 71.6% of total sales rebounded marginally by 0.2% in May after registering a decrease in April (-3.4%). The increment was mainly contributed by the manufacture of computer, electronics & optical products (7.9%); manufacture of wood & products of wood & cork (7.5%); and manufacture of coke & refined petroleum products (2.4%) industries. Nonetheless, the domestic-oriented industries sustained positive momentum to record double-digit growth of 12.3% in May (Apr: 1.6%). Meanwhile, the vibrant performance of domestic-oriented industries was primarily underpinned by the manufacture of motor vehicles, trailers & semi-trailers (20.1%); manufacture of food processing products (12.9%); and manufacture of fabricated metal products, except machinery & equipment (10.6%) industries. As compared to the previous month, export and domestic-oriented industries advanced by 1.4% and 0.9% respectively after both industries registered a contraction of 7.2% in April.
Employment in manufacturing sector increased slightly. There were 2.36mn persons engaged in the manufacturing sector in May, which increased by 2.6% YoY as against 2.30mn persons registered in May 2022. The increase was supported mainly by the food, beverages & tobacco products (May: 5.9%; Apr: 5.6%); electrical & electronic products (May: 4.2%; Apr: 4.2%); and wood, furniture, paper products & printing (May: 2.5%; Apr: 2.7%) sub-sectors. As compared to the preceding month, the number of employees in this sector increased marginally by 0.3%.
In line with the increase in the number of employees, the salaries & wages paid in the manufacturing sector increased by 4.0% YoY, which amounted to RM8.1bn in May. In a month-on-month comparison, the salaries & wages rose by 1.0% from RM8.0bn which was recorded in April. Hence, the average monthly salaries & wages per employee was RM3,438 in May, went up by 1.4% YoY and grew by 0.7% MoM.
Meanwhile, the sales value per employee or productivity in May increased by 0.8% YoY to record RM62,315 as compared to RM61,847 in the same month of the previous year. Meanwhile, the average sales value per employee increased 1.0% as compared to April 2023.
Stronger manufacturing sector sales value. Overall performance for January to May 2023, the sales value of the manufacturing sector rose by 5.1% YoY, to register RM741.2bn as against the same period of the preceding year. Meanwhile, the number of employees added by 2.6% to record a total of 2.36mn persons with salaries & wages grew by 4.1% to RM40.6bn. Besides that, sales value per employee registered a growth of 2.5%, amounting to RM314,636 for the first five months of 2023.
Malaysia's manufacturing sales have returned to positive growth, showing a year-on-year increase of 3.3%. This positive growth aligns with the rebound seen in Malaysia's Industrial Production Index, which recorded a growth rate of 4.7% in May. However, it is worth noting that the Malaysia manufacturing Purchasing Managers' Index (PMI) fell to a five-month low in June (47.7; May: 47.8) and remained in contraction for the tenth consecutive month. The weakness in the manufacturing industry is mainly due to subdued demand conditions that led to low output, in line with the downtrend in external trade. Malaysia's exports experienced a decline for the third consecutive month, albeit at a marginal pace of 0.7% YoY. However, there was a positive development in overseas shipments of manufactured goods, which make up 85.4% of total exports. After two consecutive months of contraction, these shipments turned around and saw a year-on-year increase of 1.8%.
These economic indicators suggest a mixed picture for Malaysia's manufacturing sector. While there are positive signs of recovery in manufacturing sales and industrial production, the PMI data indicates continued contraction. The marginal decline in exports and the subsequent improvement in overseas shipments of manufactured goods also reflect a complex economic landscape. Despite the slight improvement seen in the latest manufacturing data, it still correlates with our view that Malaysia is experiencing headwinds in the manufacturing sector. Downside risks remain given the uncertain global economic outlook and the potential for exports to weaken. We still expect growth to remain moderate in the coming months and the momentum in both manufacturing production and manufacturing sales value is expected to stay soft, amid its cautious outlook on the manufacturing sector and trade performance.
Source: BIMB Securities Research - 13 Jul 2023
Created by kltrader | Aug 12, 2024
Created by kltrader | Aug 12, 2024
Created by kltrader | Aug 09, 2024
Created by kltrader | Aug 09, 2024