KUALA LUMPUR: The seasonally adjusted S&P Global Malaysia Manufacturing PMI rose from 49.5 in October to 50.1 in November, indicating a slight improvement in sector conditions and marking the first uptick since May 2024.
“Malaysian manufacturers saw operating conditions move back into positive territory in the penultimate month of 2025, albeit only fractionally. New orders were the key point of improvement in November, rising to the greatest extent since April 2022. This encouraged a stronger rise in purchasing activity and a renewed uplift in staffing levels that was the strongest since September 2022,” S&P Global Market Intelligence economist Usamah Bhatti said.
Despite this, he noted that firms held back on raising production levels amid reports of raw material shortages, increased competition and a rising tax burden.
"Nonetheless, confidence regarding activity in the manufacturing economy surged on the month following positive demand movements.
“The degree of optimism was at the highest since July 2013, underpinned by hopes of business expansions, new product launches and higher customer numbers,” Bhatti said.
The historical relationship between the PMI and official GDP data suggests solid economic growth in the final quarter, consistent with further annual expansion in manufacturing output.
S&P Global said the improvement in business conditions was driven by a renewed uptick in new orders. The seasonally adjusted index rose above the 50.0 no-change level for only the fourth time this year and reached its highest point in more than three and a half years.
“Stronger client confidence and new product launches were cited as key factors behind the increase. Foreign demand for Malaysian manufactured goods meanwhile moved towards neutrality in the penultimate month of the year, as the rate of moderation was only fractional overall,” it said.
Despite stronger demand, output volumes were still trimmed, though only slightly. Some firms rebuilt finished-goods stocks to meet current orders, resulting in the first, albeit marginal, rise in post-production inventories in 41 months.
Meanwhile, business confidence rose to its highest since July 2013 as firms anticipated new products, expansions and more customers to lift output. The improved outlook also drove the strongest hiring since September 2022, ending four months of staff cuts.
S&P Global said firms also increased purchasing activity in line with the improved outlook, extending the current five-month run of input accumulation. This came alongside the first improvement in vendor performance since May.
However, pre-production inventories were reduced for a fifth straight month as firms drew down stocks for production.
Despite the renewed increase in sales, firms still had sufficient
capacity to complete existing orders. As a result, backlogs of work were depleted to the largest extent since October 2023.
Input cost inflation rose for a second month to a four-month high, lifted by higher raw material and tax costs. In response, firms raised output charges at the fastest pace in 15 months to protect margins.
