Malaysia Manufacturing Growth Slows in August

Malaysia’s S&P Global Manufacturing PMI edged down to 50.2 in August 2026 from 50.7 in each of the previous two months. Growth in new orders slowed during the month, contributing to a renewed moderation in manufacturing output. Still, firms increased employment for the first time in four months, while backlogs of work fell for a second consecutive month. Meanwhile, buying activity declined for the first time in five months as firms drew on inventories to meet demand, causing input inventories to fall after two months of marginal accumulation. Manufacturers also continued to face longer lead times for inputs, though the incidence of delays was only slight and the least pronounced in seven months. Regarding prices, both input costs and output charges rose modestly in August, with both rates of increase easing to six-month lows and remaining historically subdued. Finally, business confidence remained historically weak and was broadly unchanged from July.

Malaysia’s S&P Global Manufacturing PMI came in at 50.7 in July 2026, unchanged from the previous month. Growth in new orders accelerated to an eight-month high, while production increased only slightly. Supporting the rise in total new orders was a renewed increase in new export orders, driven by improved demand from international customers, including those in Europe and the US. This also pushed purchasing activity marginally into expansion territory. However, supplier lead times lengthened for an eighth consecutive month. Meanwhile, firms reported having sufficient capacity to process existing workloads and new order inflows, as reflected by a renewed decline in backlogs. With this, manufacturers reduced employment levels in July. Both input costs and output prices increased at their weakest rates in five months. Nonetheless, business confidence fell to a three-month low and remained subdued by historical standards, as geopolitical tensions continued to weigh on the outlook.

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.