Published December 8, 2008

M'sian manufacturers see tough 2009

80% expect to be hurt by global recession: survey

Email this article
Print article
Feedback

(KUALA LUMPUR) Malaysia's manufacturers may face a 'tough year' in 2009 as the global recession cuts demand for computer chips, components and electronic goods, a trade group said after a survey of local businesses.
Eye on the economy: Businesses see the global recession cutting demand for computer chips, components and electronic goods

Next year will be 'a very trying time, a tough year', Mustafa Mansur, president of the Federation of Malaysian Manufacturers, said in an interview in Kuala Lumpur last Friday. 'We will feel the impact.'

Four-fifths of the respondents in the trade group's survey expect that new orders and sales forecasts will be 'strongly' or 'moderately' hurt by the global recession.

Malaysia's government on Nov 4 announced a RM7 billion (S$2.9 billion) spending package for public projects to support economic growth that is set to slow to the worst pace in eight years in 2009.

Global economic outlook will worsen in the next 6-12 months, according to 82 per cent of the 113 companies surveyed last month.

'With half the world in recession, the downside on Malaysia's manufacturing sector will be significant,' said Irvin Seah, an economist at DBS Group Holdings Ltd in Singapore.

He expects four straight quarters of year-on-year declines in orders, starting from the last three months of 2008.

Global growth is headed for a 'major downturn' next year, with US gross domestic product growth likely slowing to 0.1 per cent, the International Monetary Fund (IMF) said in October.

The United States, Japan, Germany and the 15 European nations that use the euro are in recession.

Malaysia's government has forecast its economy to expand 3.5 per cent next year.

The US$181 billion economy grew at the slowest pace in three years last quarter, prompting Bank Negara Malaysia, the nation's central bank, to cut interest rates for the first time since 2003 on Nov 24. Exports slid in October for the first time in 15 months.

About 77 per cent of the survey's respondents said that their capital investments would be 'negatively affected', Mr Mustafa said.

Job retrenchments are also expected, he added. -- Bloomberg