FMM: Manufacturing sector poised for further recovery in H2022
01 Mar 2022
The manufacturing sector is poised for further strengthening of its recovery momentum in the first half of 2022 (1H2022), said the Federation of Malaysian Manufacturers (FMM).
Heading into 2022, growing external demand is expected to bolster recovery in the manufacturing sector amid continuing domestic and external headwinds, it said.
“All forward-looking indicators are back in the black with readings above the threshold level of optimism, portending that the near-term prognosis for the manufacturing sector is positive.
“The expected business activity index soared to 122 from 60 previously, implying that business activity is expected to gain further momentum in the next six months,” FMM president Tan Sri Soh Thian Lai said in a statement today in conjunction with the release of the 20th edition of the FMM-Malaysian Institute of Economic Research (MIER) Business Conditions Survey.
The bi-annual collaboration between FMM and MIER revealed that 39% of the respondents believed that business activity will pick up soon, while 17% were pessimistic in this aspect, which is in sharp contrast to 55% who replied similarly in the previous survey.
For the first six months of 2022, the survey shared that the most popular productivity-related strategy/action that most respondents will undertake is training and upskilling (67%); 45% will increase their technical workers; 43% will implement lean manufacturing; while 13% will allow flexi-hours and employees to work from home.
Where technology-related strategies are concerned, 74% are planning to adopt Industry 4.0, while 65% and 44% are considering automation and digitalisation, respectively.
Other strategies include market expansion (61% responses), new product introduction (48%), deployment of research and development and innovation (28%), expansion of local supply chain (26%), and business diversification (26%).
The survey also revealed that the manufacturing sector ended the year 2021 on a positive note as economic activities resumed with the easing of containment measures and recovery of global demand for manufactured goods.
“Both current and forward-looking indicators in the latest survey picked up pace from 1H2021, an indication that confidence among manufacturers generally improved in the second half of 2021 (2H2021), and the sector is poised for further strengthening of its recovery momentum in 1H2022,” it said.
The survey, which drew 702 respondents nationwide, was conducted from Jan 5 to Feb 10, prior to the Russia-Ukraine conflict, and tracked business confidence via the FMM-MIER Business Conditions Index covering the actual performance in 2H2021 and outlook for 1H2022.