KUALA LUMPUR, May 8 (Xinhua) -- Malaysia's manufacturing conditions have continued to deteriorate amid the Middle East crisis, as freight and logistics cost disruptions have now spread across the manufacturing value chain, affecting raw material availability, order volumes, cash flow, investment decisions and employment, the Federation of Malaysian Manufacturing (FMM) said on Thursday.
In its latest survey involving 225 companies, FMM said 72 percent of respondents reported deteriorating business conditions since early April, with 22 percent describing the decline as significant.
The survey showed 70 percent of manufacturers experienced worsening raw material supply conditions.
Inventory levels are also tightening, with 40 percent of respondents holding only one to two months of critical materials, while 29 percent reported inventories lasting between two and three weeks.
Freight costs remain elevated, with 87 percent of respondents reporting higher shipping costs compared with pre-crisis levels. Meanwhile, 86 percent reported longer transit times due to vessel rerouting via the Cape of Good Hope, with shipping routes to Europe now taking between 35 and 45 days, compared with 25 to 30 days previously.
About 68 percent of respondents said they are facing working capital or cash flow stress, while 13 percent described the situation as severe enough to affect supplier payments or order fulfillment.
The survey further showed that 28 percent of manufacturers have implemented or are planning workforce adjustments due to the crisis.
"The survey shows that the conflict is no longer affecting only freight rates and logistics costs. It is now reducing production, weakening order books, straining company finances and putting jobs at risk," said FMM. ■
