Published May 20, 2009

M'sian manufacturing sales shrink 25.5%

Petroleum, computer, iron and steel products hit hardest by demand slide

By PAULINE NG
IN KUALA LUMPUR

	Email this article
	Print article
	Feedback

THE value of sales by Malaysia's manufacturing sector shrank 25.5 per cent or RM12.5 billion year on year in March to RM36.6 billion (S$15.2 billion), as refined petroleum products, computers and peripherals and iron and steel products continued to suffer sharp falls in demand.

On a monthly basis, March sales value was RM2.2 billion or 6.3 per cent higher than that in February, when the contraction was 22.9 per cent. However, February is a short month when many factories take a long break for the Chinese New Year.

As a result of the March decline, the value of the manufacturing sector's sales in the first quarter slipped almost 26 per cent or RM36.6 billion year on year to RM104.6 billion, from just over RM141 billion previously.

The number of employees engaged in manufacturing was also 7 per cent or 71,440 lower year on year at 951,848. And productivity or average sales value per employee dipped 20.3 per cent to RM109,871, according to data released by the Department of Statistics yesterday.

Despite the continuing decline, there are rays of hope - the value of manufacturing sales increased month on month in February and March, after a low of RM33.7 billion in January.

But whether the bottom has been reached will not be apparent for several months.

The year on year plunge in March sales by key industries shows demand remains weak. Manufacturers of basic industrial chemicals except fertilizers and nitrogen compounds saw their monthly sales value almost halve.

Basic iron and steel product makers suffered a drop of 41 per cent. And computers and peripherals - a traditional mainstay - managed sales of only RM2.9 billion, versus RM4.9 billion in March 2008.

Sales of refined petroleum products - by far the largest manufacturing segment in value terms - contracted 37 per cent to RM6.6 billion in March, versus RM10.5 billion a year earlier.

Wages paid in March fell 8.4 per cent or RM168 million to RM1.84 billion. This was also 2.5 per cent or RM47.3 million less than the amount paid in February.