Malaysia’s Producer Price Index (PPI) for local production fell 3.8% year-on-year in July 2025, easing from the 4.2% decline recorded in June, according to the Department of Statistics Malaysia (DOSM).
The softer contraction was largely driven by continued weaknesses in the Mining and Manufacturing sectors. The Mining index fell 8.7% (June: -8.0%), dragged down by lower prices in the extraction of crude petroleum (-9.8%) and natural gas (-4.7%). Meanwhile, the Manufacturing sector declined 4.0% (June: -4.3%), reflecting sharper falls in the manufacture of coke & refined petroleum products (-15.7%) and computer, electronic & optical products (-7.6%).
In contrast, several sectors registered growth. The Agriculture, forestry & fishing sector rose 1.1% (June: -0.3%), boosted by higher prices in growing of perennial crops (3.1%). The Electricity & gas supply sector climbed 4.0% (June: -0.2%), while the Water supply sector posted a slight decline of 0.1%.
On a month-on-month basis, the PPI increased 0.3% in July, rebounding from a 0.7% contraction in June. The Agriculture, forestry & fishing sector rose 2.5%, while utilities also posted gains with Electricity & gas supply up 3.4% and Water supply up 0.9%. The Mining index remained unchanged, while Manufacturing slipped 0.1%, weighed down by declines in computer, electronic & optical products (-0.5%) and food products (-0.4%).
All stages of processing continued to register year-on-year declines. The Crude materials for further processing index contracted 5.8%, led by non-food materials (-7.0%). The Intermediate materials, supplies & components index fell 3.7%, due to a sharp drop in processed fuel & lubricants (-9.3%). The Finished goods index slid 2.4%, dragged by capital equipment (-3.9%).
However, on a monthly basis, all stages showed slight improvements, with crude materials rising 0.8%, and both intermediate materials and finished goods edging up 0.1% each.
Economists noted that while July’s figures suggest some stabilisation, the persistence of declines in manufacturing and energy-related sectors indicates continued cost pressures and weak demand conditions across key industries.
