Malaysia: Malaysia’s manufacturing PMI declines in March
The S&P Global Manufacturing Purchasing Managers’ Index (PMI) fell to 48.4 in March from 49.5 in February. As a result, the index moved further below the 50.0 no-change threshold, and signaled a faster deterioration in manufacturing sector operating conditions compared to the previous month.
The decline in March was primarily due to a sharper moderation in new orders, both domestically and internationally, seeing the most pronounced reduction in 2024 so far. This moderation led to a significant slowdown in production, the greatest in three months, and a marginal increase in job shedding, the steepest in four months. Despite these challenges, there was a renewed improvement in vendor performance, with suppliers fulfilling orders more efficiently amid softer demand, contributing to shorter delivery times and reduced backlogs of work.
On the pricing front, input cost inflation rose to a three-month high by the end of the first quarter, driven by currency weakness and higher global prices for raw materials, although this did not lead to higher output prices, which remained unchanged. Business sentiment softened to the lowest level in seven months, as manufacturers’ optimism was tempered by concerns over the timing of a recovery in demand, despite hopes for an improvement.