Malaysian manufacturers optimistic as sector nears stabilisation, demand improves
The seasonally adjusted Malaysia Manufacturing PMI rose from 49.3 in June to 49.7 in July, signalling improving momentum despite remaining below the neutral 50.0 threshold.
New orders declined at the smallest rate in five months, driven partly by the first increase in export sales since November 2024.
Manufacturing production volumes softened at the mildest pace since February, reflecting the improved demand conditions.
"Malaysian manufacturers saw pressure on operating conditions soften at the start of the second half of 2025, as the latest PMI data signalled that the sector moved towards stabilisation,' said Usamah Bhatti, economist at S&P Global Market Intelligence.
Companies increased input purchases for the first time in exactly three years, marking the strongest expansion since April 2022.
Employment levels remained broadly stable during the month, while firms worked to reduce their backlogs of existing orders.
Business confidence regarding the year-ahead outlook strengthened to its highest level since February, with firms expressing hopes for broad-based economic recovery.
Input cost inflation accelerated for the third consecutive month, reaching its highest level since November 2024 due to higher raw material prices and currency weakness.
Manufacturers modestly raised their selling prices in response to increased material costs and exchange rate fluctuations.
Supplier delivery times lengthened marginally amid reports of shipping delays, though the impact remained limited.
The PMI data suggests Malaysia's third quarter began on solid footing, with indicators pointing toward continued GDP growth.
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