By Admin
KUALA LUMPUR (Feb 3): In a bid to invigorate sales amid a tepid demand landscape, manufacturers reduced selling prices for the first time since June 2023, according to the S&P Global Malaysia Manufacturing Purchasing Managers’ Index (PMI) released on Monday.
Data from the latest survey indicated the second strongest reduction in prices charged in the series’ history.
“The decrease was modest, yet the most pronounced since January 2015. Purchasing activity was also scaled back in January, while stock holdings were wound down further,” said S&P.
This strategic price-cutting move highlights the manufacturers’ attempt to stimulate sales and regain momentum in a stagnant market environment.
Additionally, production and new orders continued their downward trend, further moderating from prior levels.
The S&P Global Malaysia Manufacturing PMI was little-changed in January, rising from 48.6 in December to 48.7, remained below the neutral threshold of 50.0, emphasising the ongoing softness of the manufacturing sector’s health.
This marked the eighth consecutive month of scale-back, with the latest moderation being the most pronounced since December 2023. The muted demand for new orders, driven by weak client confidence in both domestic and international markets, played a pivotal role in this decline. As export orders fell for the second successive month — at the fastest pace since October 2023 — manufacturers faced a tough external environment.
Moreover, purchasing activity witnessed a more rapid decline, reflecting a cautious approach by manufacturers, as they adjusted to subdue production needs. The reduction in purchasing levels accelerated at the start of the year, marking the fastest pace of decline in three months. Alongside this, inventory holdings for both purchases and finished goods were lowered, as firms sought to manage their resources prudently. Contributing factors to this reduction included delivery delays and higher raw material costs, further exacerbated by port congestion and raw material shortages, which extended suppliers’ delivery times.
Despite the challenges, the outlook for the sector was cautiously optimistic, underpinned by hopes for improved demand conditions during the year. However, the level of business confidence was observed as the softest in seven months.
Employment levels also saw a fractional reduction, marking the fourth consecutive month of decline. Despite lower capacity requirements, firms managed to work through existing backlogs, reflecting adaptability in challenging times. As 2025 unfolds, Malaysian manufacturers remain vigilant, balancing between the pressures of subdued demand and cost challenges, while maintaining a hopeful outlook for the future.