KUALA LUMPUR: The headline Purchasing Manufacturing Purchasing Managers' Index posted 47.1 in June, marginally lower than the reading in May.
It signals worsening operating conditions in the manufacturing sector.
According to the Nikkei Malaysia PMI, production declined at the sharpest rate in over three-and-a half years, led by marked fall in total new orders.
Production decreased for the fifteenth consecutive month in June and at the quickest rate since October 2012.
"Underpinning the contraction in total new orders was a drop in international demand, with new export orders declining for the first time in five months.
"As a result, employment stagnated and manufacturers cut back on buying activity for the 13th consecutive month," the report said.
New orders from abroad contracted for the first time since the start of 2016 in June.