Better Job Prospects in the Manufacturing Sector
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According to the Malaysian Institute of Economic Research (MIER), the Business Conditions Index (BCI) for the fourth quarter of 2021 (4Q21) suggests that manufacturers have begun to rebuild confidence.
The 4Q21 index revealed a favourable outlook, climbing 25 points to 122, well above the 100-point barrier. In comparison to 4Q20, the index improved by 6.6 points year-on-year.
As a result of an improved economic outlook, consumer expenditure began to climb after a two-year slump. Higher vaccination rates in 4Q21 permitted more localities to eliminate restrictions that had impeded retail sales, resulting in increased spending.
According to the BCI, this was due to an increase in local and international demand, resulting in a considerable increase in sales and an increase in industrial production volume. Other factors contributing to the increase included a minor increase in capital expenditure and capacity utilisation, as well as improved employment conditions.
Domestic Orders Increased
Domestic orders have climbed significantly this quarter, with the sub-index rising 37.6 points to 71.4 points. Despite sluggish local demand in companies producing paper and paper products, more than half of respondents (52%) reported an increase in domestic orders in 4Q21.
Orders for metal products, such as automobiles and transportation equipment, have usually increased in line with strong sales results.
Despite the fact that demand was mild in this quarter, more than half of the manufacturers polled (71.4%) predicted an increase in domestic orders in the coming three months.
Local demand for rubber, plastics, metals, machinery and equipment, electrical equipment, motor vehicles, and transportation equipment is projected to rise.
Stock Prices Remain Stagnant
According to the survey, stock levels among the manufacturers polled are generally not rising, with the exception of the paper and paper products, non-metallic mineral goods, and furniture industries, which have grown their inventories.
41% of respondents reported unchanged inventories, including manufacturers of leather and allied products, electrical equipment, other manufacturing, and repair and installation of machinery and equipment, as well as plastics and metal products.
Better Job Possibilities
According to the report, employment conditions improved dramatically in 4Q21 as compared to the previous quarter. According to 32% of businesses, the number of employees has increased, which is similar to 1Q21 sentiments.
It should also be noted that the number of jobs lost because of layoffs increased by 8% from the previous quarter to 23%.
In response to excellent sales performance, companies producing metal goods and other manufacturing, as well as repair and installation of machinery and equipment, boosted their employability.
As a result of unchanged output volume, some industries such as paper and paper products, nonmetallic mineral products, and machinery and equipment reported unchanged employment.
Employer headcount is expected to stay stable in the coming quarter, with 65% of firms surveyed planning to retain their headcount.
The lifting of restrictions and reopening of major sectors is important for Malaysia's recovery. Due to the lengthy lockdown, business operations will need time to ramp up to pre-pandemic capacity. The war against Covid-19 isn't over yet. However, stronger business prospects are expected in the coming quarter.
Source: The Malaysian Reserve