KUALA LUMPUR: Malaysia’s manufacturing sector performance in the coming months will be partly shaped by how the situation in West Asia unfolds.
The latest data shows that manufacturers are already taking steps to mitigate some of the impacts, said S&P Global Market Intelligence economist Maryam Baluch.
In a note on the S&P Global Malaysia Manufacturing Purchasing Managers’ Index (PMI) for April 2026, she said data showed that manufacturing production rose for the second consecutive month in April, with the rate of growth the strongest since December 2021.
The expansion was attributed to strategic stockpiling by both manufacturers and their clients, as the war in West Asia contributed to material shortages and rising prices.
Baluch said that stockpiling efforts boosted production, partly directed towards building inventories of finished goods.
Firms have also reported that their clients had a similar rationale, resulting in renewed growth in new orders in April.
"Efforts by customers to build safety stocks were registered even as output price inflation hit a record high in April.
"As firms looked to protect themselves against intensifying price pressures, purchasing activity increased as firms sought to raise their stocks of pre-production items,” she said.
However, she noted that with supply-chain disruptions widespread, firms continued to see stocks of inputs decline.
Higher energy and material costs due to the ongoing war have contributed to a marked increase in prices in April, causing the pace of input cost inflation to hit a 45-month high.
In turn, charges were raised substantially, to the steepest rise in history.
Meanwhile, the seasonally adjusted S&P Global Malaysia Manufacturing PMI posted a four-year high of 51.6 in April, up from 50.7 in March, signalling a moderate improvement in the health of the manufacturing sector.
The index remained above the neutral 50.0 mark for the second straight month. - Bernama
