KUALA LUMPUR: The headline Nikkei Malaysia Manufacturing Purchasing Managers Index (PMI) was up at 48.1 in July 2016 versus 47.1 in June 2016, signaling a weaker rate of deterioration in operating conditions in Malaysia.
In a statement, financial information services provider, IHS Markit, said the latest reading was the highest since March this year, which reflected softer declines in output, new orders and stock purchases. The index is an indicator of the manufacturing industry’s performance, whereby any figure greater than 50.0, indicates overall improvement of the sector’s operating conditions.
“Contributing to the overall decline in manufacturing conditions was a contraction in output.
“However, the rate of decrease was the weakest since January. Where output fell, panelists mentioned a lack of new sales,” said IHS Markit.
Despite subdued demand, volume of unfinished work were accumulated for the first time in six months.
Moreover, the rate of increase was the highest since last November and data suggests that due to a recent fall in employment, extra pressure was placed on manufacturing capacity.
Markit Economist Amy Brownbill said operating conditions in Malaysia declined at a slower rate at the start of the third quarter of 2016, helped by slower contractions in both production and new orders.
“However, manufacturers cut back on their workforce numbers for the first time since April, suggesting that companies are less optimistic towards the outlook.
“Cost inflationary pressures have eased for the first time in four months and helped producers to improve their profit margins.
“As a result, manufacturers increased their charges at a weaker rate,” she added. — Bernama