Manufacturers gloomy on outlook due to Covid-19, says Federation of Malaysian Manufacturers
KUALA LUMPUR (Sin Chew Daily/ANN) - The manufactures see a gloomy outlook for the economic performance of the first half of 2020 due to Covid-19 outbreak as revealed in a business condition survey jointly carried by Federation of Malaysian Manufacturers (FMM) and the Malaysian Institute of Economic Research (MIER). The survey, which is carried out once every 6 months, rates the economic growth and market for the first half of the year below the optimistic threshold level.
The manufactures are pessimistic about the economic performance and market for the first half of 2020 due to Covid-19 outbreak as revealed in a business condition survey jointly carried by Federation of Malaysian Manufacturers ( FMM) and the Malaysian Institute of Economic Research ( MIER).
The survey, which is carried out once every 6 months, rates the economic growth and market for the first half of the year as gloomy and below the optimistic threshold level mainly due to the coronavirus outbreak.
FMM president Soh Thian Lai, in a statement on the 16th edition of the FMM-MIER business condition survey, said manufacturers were not optimistic about the outlook of the market for the first half of the year. Apart from increase in cost of production, manufactures were gloomy over the local and oversea market, production volume, capital investment and employment rate.
The survey was conducted from 12 Dec last year to 31 January 2020 (two-week of extension to assess impact of coronavirus outbreak).
Only 17% to 20% of respondents predicted that the domestic demand and export sales would be stronger in the first half of this year. Another 33% of respondents expected market demand to decline and 30% of respondents were keen to reduce production.
A total of 51% of respondents projected that the cost of production would increase in the first half of 2020. Raw materials topped the list for increase in production costs by 50%, followed by labour costs 45%, wages and salaries 25%, and utilities 21% (electricity, fuel, natural gas and water).
A quick survey was conducted on 7 February to ascertain the impact of the outbreak on manufacturers and trade. The main concern of manufacturers was impact on production due to reduced supply of raw materials from China including moulded and metal press parts, iron and steel products, ingredients for food and beverage production, parts and components for machinery, paper and packaging material, plastic materials including resin and others.
“Manufactures are also concerned with the coronavirus outbreak in China. To some extent, this has affected the import of raw materials,’’ it said