Malaysia’s factory activity slowed further in October amid renewed decline in order volumes though manufacturers grew more optimistic of better demand ahead.
The S&P Global Malaysia Manufacturing PMI slightly edged down to 49.5 in Oct-25 (Sep-25: 49.8), marking 17 straight months of decline, the fastest pace of contraction since Jun-25. The reading points to a slightly faster pace of contraction in Malaysia’s manufacturing sector. New orders declined for the first time in three months, led by a sharper drop in export demand, causing output to contract at the fastest pace in five months.
Firms cut staffing levels again but managed to clear backlogs at the quickest rate since Feb-25. Purchasing activity grew at the softest pace in the four months, while inventories moderated. Delivery times were lengthened for a second month due to persistent shipping delays and material shortages. On prices, input costs continued to rise, yet firms reduced selling prices for the first time in six months to spur demand.
Looking ahead, MBSB Research said business confidence strengthened to its highest level since Apr-23, supported by expectations of a rebound in new orders. Earlier data showed that industrial production (IPI) growth accelerated to +4.9%yoy in Aug-25 (Jul-25: +4.2%yoy). The house anticipates a stronger reading for Sep-25, in line with the surge in exports (+12.2%yoy; Aug-25: +1.9%yoy), likely driven by front-loading of tech products ahead of potential semiconductor tariffs.
However, the house did note that the slightly lower PMI reading in Oct-25 points to a possible moderation in IPI growth, suggesting softer momentum going forward.
