The headline Nikkei Malaysia Manufacturing Purchasing Managers Index (PMI) has deteriorated to 47.1 in April 2016 from 48.4 in March.
Financial information services provider Markit said the PMI April Index was the lowest in five months, according to Malaysia's (Bernama) News Agency. The index is an indicator of manufacturing performance, whereby any figure greater than 50.0, indicates overall improvement of sector operating conditions.
The headline PMI signalled a sharper rate of deterioration in the Malaysian manufacturing sector. According to panellists, a drop in demand and unstable economic conditions contributed to the fall in output. A marked contraction in production was matched by a sharp decrease in total new orders. "In fact, new work intakes declined at the quickest rate since December 2015. The data suggested that a fall in domestic demand led to a further contraction in total new orders," Markit said.
An economist at Nikkei-Markit said that sharper declines in both new orders and production and softer growth in international demand eased caused manufacturers to shed some of their workers for the second time this year. "This suggests firms remain uncertain towards the outlook. Goods producers also cut back on input buying and at the fastest rate since the survey began in July 2012. "Cost inflationary pressures intensified, after having increased at the weakest rate in eight months during March. "Reports of the weak exchange rate pushing up imported raw material costs were cited as the main factor behind the rise in input prices," the economist added.