SUNGAI BULOH, March 11 — The Federation of Malaysian Manufacturers (FMM) said the country’s manufacturing sector is expected to grow moderately in the first half of 2024 (1H2024) amid improving economic conditions.
FMM president Tan Sri Soh Thian Lai said the sector could gain momentum, albeit slowly, with an expected pick-up in sales, production, capital investment and hiring as global interest rates and inflation ease.
"Although we faced many challenges in early 2023, by the second half of 2023 (2H2023), manufacturing activities started to improve,” he said at the release of the results of the FMM Business Conditions Survey in Wisma FMM here today.
The survey, conducted from January 12 to February 26, 2024, drew 613 respondents nationwide.
Notwithstanding the improvements, some indicators remained below the optimism threshold, an inference that respondents are cautious about the first half of 2024, in particular local and export sales, production volume and capacity utilisation, he noted.
The survey tracked business confidence via the FMM Business Conditions Index (FMM BCI) and covered the actual performance 2023 and the outlook for the first half of 2024. It showed that all indicators had increased from the previous survey, except for the number of employees and the cost of production.
Soh said employers are still cautious and concerned about hiring employees as they see employment as a fixed cost and that the cost of production remains on the high side due to the weaker ringgit. “The cost of production remains high, as you know, due to our weak ringgit and also our cost increase of up to 37 per cent for the past two years," he added.
On the sector's revenue and profit growth, Soh said a majority (56 per cent) of survey respondents see an increase of up to 10 per cent compared to 2023.
— Bernama
