Malaysia's manufacturing sector returns to growth in October as PMI rises to 51
Malaysia's manufacturing sector returned to growth in October after a near-stagnant reading in September. The improvement was supported by a recovery in output and new orders, although business confidence fell to a six-month low.
Highlights
- Malaysia's Manufacturing PMI rose to 51 in October from 49.9 in September, signaling a sector recovery led by strong growth in new orders.
- Improved international demand drove higher output, increased raw-material purchases and employment growth in the manufacturing sector.
- Input costs and output charges rose at faster rates, while business confidence fell to a six-month low in October.
This article was translated from the original. Read the original version by our correspondent here.
New orders and output recover in October
As reported by The Edge Malaysia, citing S&P Global, Malaysia’s seasonally adjusted Manufacturing Purchasing Managers’ Index returned to growth territory in October, posting a reading of 51 after recording 49.9 in September.Growth in new orders was strong and was also supported by a further improvement in international demand for Malaysian manufactured goods. The higher volume of new work, in turn, supported a renewed expansion in output, while firms increased purchasing activity and sustained employment growth.
Cost pressures rise as confidence weakens
Although demand and output improved, business confidence fell to a six-month low in October.At the same time, inflationary pressures intensified as input costs and output charges both rose at faster rates. The combination of recovering activity and rising costs shows that manufacturers still face a mixed operating environment, despite an improvement in the sector’s health early in the fourth quarter.
In our earlier report on the recovery in business leaders’ sentiment in Malaysia, we examined the rise in the Vistage Malaysia CEO Confidence Index in the third quarter of 2026, although it remained below the 100-point baseline. The article highlighted how a stronger macroeconomic environment helped improve expectations for revenue, investment, profits and hiring, but caution remained evident amid economic uncertainty and cost pressures.
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