KUALA LUMPUR, June 12 (Xinhua) -- Malaysian manufacturers are facing mounting commercial losses from the prolonged conflict in the Middle East, with companies reporting lost orders, discontinued product lines and customer attrition as cost pressures show little sign of easing, according to a survey by the Federation of Malaysian Manufacturing (FMM).
The survey, conducted between May 25 and June 10 among 196 companies, found that 87 percent of respondents said operating conditions had either deteriorated further or remained unchanged since early May, the FMM said in a statement.
While freight and energy costs initially drove the disruption, the impact has widened to investment, employment and export competitiveness. The FMM said the crisis had moved beyond a cost challenge and was now causing lasting commercial damage.
Only 6 percent of manufacturers said they were able to pass on higher costs while maintaining margins, while 58 percent were operating at or below break-even on affected product lines. About 39 percent reported losing orders to competitors in less affected markets, 19 percent had discontinued unprofitable products, and 9 percent had lost at least one major customer or contract.
Freight and logistics remained the biggest challenge, with 86 percent of respondents facing elevated shipping costs and 54 percent reporting further increases since early May. More than half of manufacturers said sea freight remained their only commercially viable transport option.
The survey also found that 42 percent of companies had adjusted their workforce through hiring freezes, reduced working hours or retrenchment plans, while 41 percent had deferred or cancelled investment, automation or expansion projects.
"Without targeted intervention, the cumulative impact on costs, competitiveness, investment and employment will intensify," it said. ■
