Malaysia's manufacturing activity remained flat in August amid weak demand and the latest data expect figures for next month to weaken.
The seasonally adjusted manufacturing Purchasing Managers Index (PMI) was unchanged at 49.7 points for August according to the S&P report. It is still in the contraction phase following a reading below 50 points indicating weakness in the sector.
The latest reading also shows that Malaysia's economy grew in the third quarter at almost the same rate as seen in the second quarter.
In August, general demand remained weak and prompted firms to cut output at the steepest rate in four months.
Survey data predicts that the coming months will likely remain flat as manufacturers reduce purchasing activity, stocks and finished goods due to a lack of new orders.
On employment data, manufacturers reported a slight decline for the second consecutive month indicating sufficient capacity to accommodate outstanding business fell to the largest level since April.
However, manufacturers are hopeful that new orders will recover to support confidence that production will increase over the next 12 months.
S&P reported that overall confidence levels remained robust at a position weaker than the long-term series average.
