Malaysia Manufacturing Sector Contracts in September
Malaysia's manufacturing sector entered a contraction in September as new orders dropped sharply and output declined for a second consecutive month.
The manufacturing sector in Malaysia entered a contraction in September, with the S&P Global Malaysia Manufacturing Purchasing Managers’ Index falling to 49.9 from 50.2 in August. This shift ended a three-month period of improvement and was primarily driven by the fastest decline in new orders since June 2025, alongside a second straight month of reduced output.
Maryam Baluch, an economist at S&P Global Market Intelligence, noted that while easing inflationary pressures and employment growth were positive, weaker business confidence and moderations in output pointed to subdued conditions. Manufacturers struggled with supplier performance issues caused by container shortages, port congestion, and adverse weather. Baluch added that external uncertainties, specifically El Niño and the war in the Middle East, make the annual outlook difficult to assess.
Despite these challenges, the sector recorded its fastest employment growth since April, as firms increased both contract and full-time staffing. Input price inflation also slowed for a fifth consecutive month, reaching its lowest level since February.
