KUALA LUMPUR: Malaysia’s manufacturing sector returned to growth territory in October, driven by a solid rebound in new orders and output, according to the latest S&P Global survey released today.
The headline seasonally adjusted S&P Global Malaysia Manufacturing Purchasing Managers’ Index (PMI) rose to 51 in October from 49.9 in September. This marked the strongest rate of expansion since April, indicating renewed operating improvement in four of the past five months.
According to S&P Global, growth in new orders reached one of the fastest rates in four-and-a-half years, supported by strengthening underlying demand from existing clients and an uptick in international orders, particularly for artificial intelligence-related products.
The higher inflow of new work prompted Malaysian factories to ramp up production, ending two straight months of output decline. To meet escalating requirements, manufacturers lifted purchasing activity and expanded staff payrolls for the third consecutive month.
However, persistent supply chain and price pressures dampened overall sentiment. Lead times for inputs lengthened for the 11th consecutive month due to port congestion, forcing firms to draw down post-production inventories to fulfil deliveries.
Inflationary pressures also gathered momentum, with material and transport costs, partly amplified by conflicts in the Gulf, pushing up input costs and prompting manufacturers to raise selling charges at an identical pace.
These escalating overheads and broader geopolitical uncertainties dragged business confidence to a six-month low.
Maryam Baluch, economist at S&P Global Market Intelligence, noted that while output and hiring expanded to accommodate new order growth, mounting cost concerns weighed heavily on outlooks.
"Manufacturers were the least optimistic since April. The latest PMI data therefore outlined external headwinds as a key threat to the economy's current resilience," Baluch said.