KUALA LUMPUR: Malaysia's Manufacturing Purchasing Managers' Index (PMI) is unchanged at 46.8 in October, signalling an easing of business conditions for the 14th consecutive month.
S&P Global said local manufacturers experienced a challenging business environment again at the start of the final quarter of 2023 as demand conditions continued to wane.
New orders moderated and production was scaled back.
Employment in the sector also eased but firms were still able to deplete backlogs of work to the greatest extent since the survey began in July 2012.
Meanwhile, currency weakness and higher raw material prices added to firms' input costs, but the rate of inflation was relatively muted.
S&P Global Market Intelligence economics director Andrew Harker said the latest PMI suggested that firms continued to struggle against the backdrop of demand weakness, both at home and abroad.
"The ongoing depletion of backlogs of work in order to support output reached its peak in October, with outstanding business cleared at an unprecedented pace.
"We will therefore need to see greater inflows of new work in the months ahead if manufacturers are to be able to maintain production schedules.
"There were further signs of a pick-up in cost inflation in October, but we are still not seeing prices increase at anything like the pace we did in the three years following the Covid-19 pandemic. In fact, with demand remaining muted, firms raised their own selling prices only slightly over the month," he said.
The firm added that the latest PMI survey pointed to a further moderation of manufacturing output, the 15th in as many months.
Lower new orders and output requirements also led firms to ease back on their input buying and run down inventories of both purchases and finished goods.
"Weak demand for inputs meant for a lack of pressure on capacity at suppliers. Lead times on the delivery of items continued to lengthen, however, amid material shortages.
"The rate of input cost inflation strengthened gradually in October, reaching the highest since last November," noted S&P Global.