Malaysia: Manufacturing PMI inches down in January
The manufacturing Purchasing Managers’ Index (PMI), produced by IHS Markit, edged down to 48.9 in January from December’s 49.1. As a result, the index moved further below the 50-threshold that separates improving from deteriorating conditions in the manufacturing sector.
January’s downturn was largely driven by declining employment levels and moderating new export orders, as surging Covid-19 infections in international markets weighed on demand. Moreover, although manufacturers remained optimistic over output growth in the 12 coming months, confidence was the weakest in five months. On the price front, supply chain disruptions led to a spike in input costs, which rose at the sharpest rate since May 2017, and prompted firms to significantly increase output charges.
Commenting on January’s reading, Chris Williamson, chief business economist at IHS Markit, said:
“Renewed efforts to contain the COVID-19 pandemic both at home and around the world have not surprisingly taken a further toll on the manufacturing sector. Not only is demand coming under further pressure, notably in consumer-facing markets, but supply chains are being disrupted by the restrictions caused by the pandemic. Global demand is exceeding supply for many key inputs as suppliers struggle to boost capacity, with delays exacerbated by a lack of global shipping capacity.”