KUALA LUMPUR (May 13): Malaysian factories could begin to see in June production stoppages as the Middle East geopolitical conflict hits home, said the prime minister's economic adviser.

Manufacturers could begin to reduce overtime and shifts as raw materials and inputs dry up, Nurhisham Hussein, the senior director of economy and finance at the Prime Minister’s Office, said in an interview with the BFM 89.9 radio station published on Wednesday.

“When we talk about the economic impact of this, the shortage of supply is going to hit us in June,” he said in the Breakfast Grille programme.

The remarks come as the US and Iran continue to fight over the control of the Strait of Hormuz, a critical waterway for the global flow of goods ranging from oil to metals and from fertilisers to grains.

A survey released last week showed more than two-thirds of manufacturers grappling with worsening supply conditions as tensions in West Asia dragged into its third month. The most affected inputs include petrochemicals, industrial chemicals, metals, and packaging materials, according to the Federation of Malaysian Manufacturing.

“We talked to a lot of companies over the last couple of months…most of them are okay for about two months in terms of raw materials,” Nurhisham said in the interview also broadcast on YouTube. “So that was roughly around mid-March or so and they will be looking for more.”

While manufacturers are scrambling for other sources, the alternatives could take longer to arrive or of wrong specifications, he flagged.

“I am thinking June [or] July is going to be [when] we can see this crisis being very evident because that's at the point where a lot of businesses run out of their old stock in terms of raw materials and they are still waiting for the new one to come in,” he added.