Malaysia Manufacturing Sector Returns to Growth

Malaysia’s S&P Global Manufacturing PMI rose to 50.7 in June 2026 from 49.0 in May, signaling a recovery in the manufacturing sector. Both new orders and output returned to growth in June after contracting marginally in the previous month. Following marginal increases in both April and May, manufacturers left input buying unchanged in June. While the fresh rise in new orders prompted some firms to increase their purchases of inputs and raw materials, others noted that demand was still too weak to justify higher buying activity. Employment levels also remained broadly stable. Meanwhile, supplier delivery performance deteriorated further in June, attributed to material shortages and the current geopolitical situation. On the price front, input cost inflation eased to a three-month low, although manufacturers raised selling prices at a faster pace than in May. Lastly, manufacturers remained optimistic about production growth over the coming 12 months.

Malaysia’s S&P Global Manufacturing PMI declined to 49.0 in May 2026 from April’s four-year high of 51.6, marking the first contraction since February. The latest reading was also the lowest in three months, as new orders and output eased amid subdued demand. Meanwhile, new export orders softened for a third consecutive month and at the sharpest rate since last October. In response to moderated output, firms paused hiring, while purchasing activity increased for the second consecutive month. The increase was driven by efforts to hedge against expected raw material price hikes and to build buffer stocks amid the ongoing conflict in the Middle East. On the price front, input costs rose, driven by higher raw material and fuel prices, although inflation eased from April's recent peak. Meanwhile, output price inflation also eased as firms sought to remain competitive. Lastly, business confidence improved for the first time in four months, reaching its highest level since February.

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.