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The Malaysian manufacturing sector continued to deteriorate mid-way through the final quarter of 2016, said IHS Markit economist Amy Brownbill. — Reuters picThe Malaysian manufacturing sector continued to deteriorate mid-way through the final quarter of 2016, said IHS Markit economist Amy Brownbill. — Reuters picKUALA LUMPUR, Dec 1 — New orders suffered the sharpest decline in the history of Nikkei Malaysia’s surveys on manufacturing conditions in Malaysia, partly because of falling international demand.

Nikkei Malaysia’s Manufacturing Purchasing Managers’ Index (PMI) posted a five-month low score of 47.1 in November, little-changed from the 47.2 score in October.

Any figure greater than 50.0 shows overall improvement of operating conditions in the manufacturing sector.

“The Malaysian manufacturing sector continued to deteriorate mid-way through the final quarter of 2016.

“Total new orders contracted at the sharpest rate in the series history, driven partly by a fall in international demand,” IHS Markit economist Amy Brownbill said in the report released today.

She noted that as a result, goods producers cut back on buying at the quickest rate in seven months.

“Meanwhile, manufacturers’ profit margins were hit harder, as input prices rose at the joint-fastest rate in the series history. Firms linked this to greater raw material costs stemming from the weakness of the Malaysian ringgit,” Brownbill said.

The report said a drop in production, new orders and stocks of purchases, as well as improved delivery times, all contributed to the below 50.0 PMI score.

Production contracted for the 20th consecutive month in November.

“As well as unstable market conditions, firms commented on a lack of new product initiatives leading to the drop in total sales. Also contributing to the fall in total sales, new export orders declined for the sixth successive month,” said the report. Brownbill, however, also highlighted an increase in jobs.

“On a more positive note, employment growth picked up to a 13-month high, suggesting firms are optimistic towards the outlook,” she said.

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