PETALING JAYA: Members of the Federation of Malaysian Manufacturers (FMM) are bracing for a sluggish second half in 2019 due to uncertainties arising from the US-China trade tensions, Brexit and global economic slowdown.
Its President Datuk Soh Thian Lai (pix) cited the organisation’s business conditions survey conducted with Malaysian Institute of Economic Research indicated that only 29% of its respondents are projecting a pick up in business activities, while 28% are expecting a slowdown and the rest foresee their business to remain unchanged.
The survey also revealed that the manufacturing sector took a downturn in the first half of the year with the Business Conditions Index registering a score of 78 points, the lowest reading for the index since the inception of the survey in the first half of 2012. The index stood at 107 points in the second half of 2018.
With regards to trade, only 25% of FMM members surveyed expect higher export sales in the second half of the year.
Despite the challenges in the export sector, Soh said FMM hopes to hit RM1 trillion in exports in the near future.
“Although we can’t put an exact estimate, we believe that it is not far off as Malaysia exports currently stand at RM998 billion,” he said.
To address the challenges stemming from the US-China trade war, the federation is looking at marketing directly into the US, particularly for the manufacturers in the electric and electronic sector and the oleochemical segment.
Soh said that some of its members are affected by the trade war as their exports are used as intermediate goods in China before the finished products are exported to the US.
“FMM is working with Malaysia External Trade Development Corporation (Matrade) to secure direct access in the US,” he said.
