However, it said the degree of optimism slid to a 20-month low as uncertainty towards raw material supplies and demand conditions weighed on confidence.
“Malaysia’s manufacturing sector faced a challenging month in February as the delivery of key raw materials from China was disrupted by the coronavirus (COVID-19) outbreak.
“Overseas demand was also adversely impacted, causing new export orders to fall at the steepest rate in over seven years,” the global information provider said in a statement today.
The headline IHS Markit Malaysia Manufacturing Purchasing Managers’ Index (PMI), a composite single-figure indicator of manufacturing performance fell to 48.5 in February, from 48.8 in January.
It said the level of employment also saw reductions as some firms opted not to renew contracts for some employees given the possibility of production being constrained by an uncertain supply of inputs.
In some cases, firms reported that shortages of supply had exerted upward pressure on raw material prices, it added.