The Malaysian manufacturing sector recorded its sixth consecutive month of contraction in November, with the S&P Global Manufacturing PMI slipping to 49.2, the lowest reading in seven months, according to MIDF Amanah Investment Bank Bhd (MIDF Research).
MIDF Research highlighted that the latest decline reflects broad-based weaknesses in the sector, primarily driven by contractions in new orders, output, and inventory levels. New orders saw their sharpest fall in seven months, while backlogs of work stabilised, reaching a four-month high due to limited production capacity.
Despite subdued domestic demand, export orders showed growth, likely driven by rising demand across the Asia-Pacific region. However, supply chain disruptions, linked to the ongoing Red Sea crisis, caused delivery times to lengthen for the seventh consecutive month.
Manufacturers faced increased cost pressures due to higher commodity prices and the depreciation of the ringgit, although input price inflation slowed to its lowest rate in nine months. Employment levels remained stable, and business confidence, while solid, stayed below its long-term average as firms remained cautious about the uncertain timeline for domestic demand recovery.
The research house noted that the PMI trend reflects continued sluggishness in the manufacturing sector, weighed down by muted domestic demand and external shocks, including elevated raw material prices and global supply chain disruptions.
However, the analyst expressed optimism for the sector's prospects, citing improved export demand as a key driver. "We expect Malaysia's production activities to continue growing, supported by the recovery in external demand," the analyst stated.
This comes amid a challenging environment for Malaysian manufacturers, who are navigating a mix of domestic and global pressures while maintaining a cautious outlook on future growth.
