PETALING JAYA: Analysts have maintained their growth forecast for manufacturing gross domestic product at 4% for the fourth quarter of this year (4Q25), making no changes to overall gross domestic product (GDP) projections for both 4Q25 and the full year.
TA Research said, although the manufacturing sector’s recovery has been gradual, firmer demand, improving employment trends, and a sharp rebound in business confidence all suggest that momentum is becoming more sustainable heading into next year.
Year-to-date, the purchasing managers index (PMI) has averaged 49.4, consistent with a sector in the early stages of recovery, with clearer signs of stabilisation emerging toward the year-end, the research house said in a report.
TA Research noted business confidence strengthened sharply in November, reaching its highest level since 2013 as firms grew more optimistic about new product launches, business expansion plans and rising customer demand, leading manufacturers to hire at the fastest pace since September 2022 and reversing four months of job cuts.
However, sustaining this momentum into next year will depend on navigating risks such as softer growth in key markets like the United States, geopolitical tensions, supply-chain volatility, rising input costs, exchange-rate fluctuations – including a stronger ringgit that may erode export competitiveness – and potential delays in investment realisation, it said.
It also pointed out that Malaysia’s manufacturing sector regained some momentum in November, supported by improvement in demand conditions.
New order inflows increased for the third time in four months, while the moderation in new export sales eased, signalling firmer external demand compared with previous months, the research house said.
Reflecting these developments, TA Research said the S&P Global Malaysia Manufacturing PMI edged up to 50.1 in November from 49.5 in October, moving above the neutral 50-point threshold for the first time since May last year.
The latest reading suggests that operating conditions are stabilising and gradually improving, although the pace of expansion remains modest, TA Research.
“According to S&P Global, the historical relationship between the PMI and official GDP statistics indicates that Malaysia likely recorded solid economic growth in the final quarter of the year, in line with a continuation of annual expansion in manufacturing output.”
For reference, the PMI averaged 49.8 over October and November, matching the average seen in the third quarter, TA Research said, adding that this suggests that the manufacturing sector continued to provide steady support to overall economic activity.
