KUALA LUMPUR: The seasonally adjusted S&P Global Malaysia Manufacturing Purchasing Managers’ Index (PMI) edged up to 49.9 in August from 49.7 in July.
The reading signalled a broad stabilisation in the health of the manufacturing sector and was the highest since June 2024.
S&P Global Market Intelligence economist Usamah Bhatti, in a statement, said August’s PMI data indicate that demand conditions in Malaysia’s manufacturing sector improved midway through the third quarter.
He said there was renewed growth in both production and new order inflows, with the latter rising at the fastest pace in three years. The data, he added, are consistent with gross domestic product (GDP) growth in 2025 so far continuing into the third quarter.
"The picture for the coming months remains clouded, however. Firms looked to raise purchasing activity in response to the trends for demand, while there was also a softening in input price inflation. That said, firms further lowered employment levels amid signs that capacity pressures remained subdued. Moreover, manufacturers lifted charges at the joint-strongest pace in a year as part of efforts to protect margins.
"Finally, the overall degree of optimism slipped to the lowest level since June 2021, as firms expressed concerns about the strength of demand and the global economic outlook,” Bhatti said.
S&P Global said that, given the historical relationship between the PMI and official GDP data, the latest figures suggest GDP growth seen so far in 2025 has been maintained into the third quarter, while also indicating sustained year-on-year improvements in manufacturing output.
Manufacturers saw demand improve in August, with total new business rising for the first time since February and at the fastest pace in three years. Export sales also grew for a second month, supported by stronger orders from Asia-Pacific customers.
S&P Global noted that Malaysian manufacturers cut jobs in August at the steepest pace since October 2023, even as demand improved and backlogs eased at a slower rate.
In line with higher orders and output, purchasing activity rose at the fastest pace since April 2022, though modestly, while stocks of purchases edged down slightly.
Vendor performance stabilised in August after two months of longer lead times, with easing supplier pressure partly offset by shipping delays.
In August, goods producers saw slower input cost inflation from higher raw material prices and some tariffs, while output charges rose at the fastest pace since August 2024.
S&P Global said hopes of stronger orders boosted production confidence, but sentiment fell to its lowest since June 2021 on global growth concerns.
