KUALA LUMPUR: The manufacturing sector continued to suffer declines in new orders in August, according to the latest Malaysian Purchasing Managers’ Index.
At 47.2, the headline number indicated the sharpest contraction in 32 months in both production and purchasing activity.
“Poor demand, unfavourable exchange rates and challenging economic conditions were cited as the main factors behind the latest fall,” said Nikkei Malaysia Manufacturing PMI.
The headline Nikkei Malaysia Manufacturing Purchasing Managers’ Index is a composite single-figure indicator of manufacturing performance.
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.
New orders at Malaysian goods producers contracted for the sixth month in a row, leading to sharp falls in both production and purchasing activity.
According to the report, Malaysian manufacturers cut back on their staffing levels in August for the third consecutive month.
“ Surveyed companies mentioned poor economic conditions and a lack of client demand leading to the scaling back of labour, the rate of decline was however modest overall.”
Cost pressures persisted, as input prices rose at the quickest rate since November 2013, consequently leading to higher charges.
“According to panellists, a combination of higher taxes and the depreciation of the Malaysian ringgit against the US dollar driving up raw material costs led to higher purchasing prices,” it said, adding that charges also increased and at a sharper rate than in the prior month.