S&P Global Malaysia manufacturing PMI falls to lowest since June 2025

S&P Global Malaysia manufacturing PMI falls to lowest since June 2025

S&P Global Malaysia Manufacturing PMI Hits Four-Month Low, Signals Persistent Contraction

The S&P Global Malaysia Manufacturing Purchasing Managers’ Index (PMI) fell to 49.5 in October 2025, down from 49.8 in September, marking the 17th consecutive month of sector contraction. This decline represents the sharpest downturn since June 2025 and underscores ongoing challenges for Malaysia’s manufacturing industry. A reading below 50 indicates contraction, and the latest figure highlights deepening pressures despite modest stabilization efforts.

New orders declined for the first time in three months, driven by a steeper drop in export sales, contributing to a five-month low in output levels. Employers continued to reduce staffing, though backlogs of work were cut at the fastest rate since February 2025. Meanwhile, purchasing activity grew at its weakest pace since June, and inventory levels moderated as firms adjusted to demand fluctuations.

Supply chain constraints persisted, with delivery delays extending for the second consecutive month due to shipping bottlenecks and material shortages. Input prices rose further, but manufacturers chose to lower selling prices for the first time in six months, reflecting strategic efforts to stimulate demand amid weak order books.

Despite the contraction, business confidence improved to its highest level since April 2023, fueled by expectations of a near-term rebound in new orders. However, the prolonged downturn highlights vulnerabilities in global demand and domestic production dynamics.

The manufacturing sector’s trajectory remains critical for Malaysia’s economic recovery, with policymakers facing renewed pressure to address structural challenges and support export-driven industries.

Data sourced from Trading Economics analysis of the S&P Global Manufacturing PMI report.