Malaysia Manufacturing Growth Hits 4-Year High

Malaysia’s S&P Global Manufacturing PMI rose to 51.6 in April 2026 from 50.7 in March, marking a four-year high and signaling a moderate improvement in factory activity. Output expanded at the fastest pace since December 2021, driven largely by stockpiling efforts as firms and clients built safety inventories amid the Middle East conflict. New orders returned to growth after two months of moderation, supported by bulk buying, though export demand weakened for a second straight month. Employment increased for a second consecutive month, while backlogs rose slightly due to material shortages and delivery delays. Purchasing activity picked up as firms sought to secure inputs, but inventories of pre-production goods continued to decline. On the price front, input cost inflation accelerated to a 45-month high, driven by rising energy and material costs, while output charges increased at a record pace. Lastly, business confidence weakened to an eight-month low.

Malaysia’s S&P Global Manufacturing PMI rose to 50.7 in March 2026 from 49.3 in February, marking the highest level since April 2022. Output rose at the fastest pace since December 2021, supported by improved demand conditions and new tender wins. Employment increased as well, ending two months of job cuts, while firms reduced backlogs, reversing February’s slight accumulation. However, new orders moderated for the second straight month, and international demand softened for the first time in three months, prompting firms to cut purchasing activity for the first time in nine months. Input cost inflation increased to its highest level since October 2024, driven by higher transport, energy, and material costs amid the Middle East conflict, while output price inflation hit a 45-month high and was stronger than the historical average. Lastly, business sentiment for the year-ahead outlook weakened further to a seven-month low.

Malaysia’s S&P Global Manufacturing PMI fell to 49.3 in February 2026 from a 20-month high of 50.2 in January. This signalled a moderation in the sector’s health for the first time in four months, amid renewed slowdowns in new orders and output. This led to a sharp drop in employment, the joint-strongest in the series history, matching the pace seen in August 2020. Purchasing activity softened, while firms continued to report longer delivery times, the most marked in 15 months. Stocks of purchases and finished goods were also reduced, extending current declines to eight and three months, respectively. After four consecutive months of decline, backlogs of work recorded a fresh increase. Regarding prices, input costs rose modestly following January’s first decrease in 68 months, while output prices fell for the first time in four months. Still, manufacturers remained optimistic about production in the year ahead, hoping that improved demand conditions will feed through to output growth.