The Malaysian manufacturing sector continued to face challenging conditions at the end of 2023, according to the latest PMI data from S&P Global. Demand remained subdued, leading firms to cut back production for the 17th consecutive month amid limited new orders.
However, the rate of decline in output eased to the slowest pace since August. Despite weak demand, manufacturers added staff for the first time in eight months in December, albeit at a marginal rate.
Input price inflation also slowed for the first time in three months to the weakest since September. The seasonally adjusted PMI was unchanged at 47.9 in December, signaling business conditions remained difficult.
Manufacturers cited weak customer confidence and subdued demand. New orders fell for the 16th straight month, albeit at a similar pace to November. New export orders also declined for the eighth month running, but at the softest rate since May.
With demand muted, firms relied on existing finished goods inventories to fulfill orders. Stocks of finished goods fell at the fastest rate since September.
The slight employment growth was the first since April, but remained fractional overall. Input costs rose at the slowest rate since September, though still solid, as firms faced high raw material prices and exchange rate weakness.
Output charge inflation was modest and steady over the past four months. Purchasing activity and stocks of purchases continued to be scaled back amid weak demand.
Vendor performance deteriorated further, though delays lengthened at the slowest pace in three months. Hopes of a demand recovery supported optimism for higher output over the next 12 months, though concerns persist about the timing and strength of a rebound.