Malaysia manufacturing sector stuck in the doldrums

PMI contracted for the 18th straight month in September.

Malaysia's manufacturing Purchasing Manager's Index (PMI) remains in the red as weak external demand continued to be a major drag, with new export orders sinking further.

Data from HSBC show that the country's PMI contracted for 18 consecutive months in September. Though at 48.6, this was the highest reading since January 2016. This compared to 47.4 reported in August.

Three of the five PMI components that constitute the headline reading – output, new orders and stocks of purchases – contracted in September.

Surveyed companies mentioned the “fall in total new orders and an unstable economic climate” as being responsible for the continued fall in output.

On the price front, input prices again surged, the joint-highest in the series' history. Respondents cited “higher raw material prices, unfavourable exchange rates and an increase in the sales tax”  as major reasons for the rise in costs.

On the other hand, output prices rose at a softer pace in September, implying an ongoing margin squeeze, said HSBC.