KUALA LUMPUR: Malaysia’s manufacturing sector is expected to stay in expansion territory through the third quarter of 2026 (3Q26), supporting continued growth in industrial activity, according to Kenanga Investment Bank Bhd
.
However, softer new orders, moderating production, falling purchasing activity and weak business confidence signal potential fading momentum, it said.
“Purchasing managers’ index (PMI) readings above 50 have historically aligned with positive manufacturing output and gross domestic product (GDP) growth.
“The latest PMI data suggest output growth will stay resilient, though moderating in 3Q26, supporting our full-year 2026 GDP growth forecast of 5.3% versus 5.2% in 2025, as reported by Bernama.
“The index has stayed above the 50 mark for a third straight month, but this points to only a slight improvement in manufacturing conditions, and the weakest expansion in the current growth run,” it said.
