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Malaysia manufacturing PMI for November dips to 48.2

KUALA LUMPUR (Dec 3): The headline Nikkei Malaysia Manufacturing Purchasing Managers’ Index (PMI) — a composite single-figure indicator of manufacturing performance — dipped to 48.2 in November from 49.2 in October.

A PMI of more than 50 points represents expansion in the manufacturing sector, and below that, contraction.

In a statement today, IHS Markit said Malaysia’s manufacturing economy observed a deeper decline in business conditions during November, with the headline PMI falling to a sixmonth low.

It said both production and new orders fell at quicker paces, leading firms to reduce input buying and subsequently reduce their stocks of purchases.

However, it said weaker demand did lead to a softer lengthening of input delivery times.

IHS Markit said firms also hired extra staff to the weakest extent since August.

Survey data continued to highlight strong cost pressures, causing firms to raise output charges as part of efforts to alleviate margin erosion.

It said contributing to the latest monthly contraction in Malaysia’s manufacturing sector was weaker demand pressures.

It explained that new orders decreased markedly in November and to the greatest extent for six months.

Meanwhile, it said export sales picked up from the previous month, indicating that the soft patch in order book volumes stemmed from domestic clients.

However, the rise in new business from overseas was only marginal.

Commenting on the Malaysian Manufacturing PMI survey data, IHS Markit economist Joe Hayes said growth prospects for the fourth quarter took a turn for the worse in November, as the headline PMI indicated a second successive monthly decline in the manufacturing sector.

“Key forward-looking gauges of macroeconomic health also depicted downside risks, as overall demand fell sharply, leading firms to be less willing to hold stock.

“Following the introduction of the Sales and Service Tax (SST) in September, panellists have mentioned weaker demand pressures in Q4 so far.

“Survey data also pointed to slowing order growth from overseas clients in November, following some relative strength in October,” said Hayes.

Source: TheEdgeMarkets