Malaysia’s Producer Price Index (PPI) for local production recorded its strongest increase so far this year, rising 9.2% year-on-year in June 2026, driven by higher prices across all major economic sectors, according to the Department of Statistics Malaysia (DOSM).
The increase accelerated from the 7.8% growth recorded in May, reflecting continued price pressures in manufacturing, agriculture, utilities and mining, although gains in the mining sector moderated from the previous month.
Manufacturing and petroleum products fuel growth
The Manufacturing sector recorded a 7.2% increase in June, more than doubling from 3.5% in May, largely supported by a 30.1% rise in the manufacture of coke and refined petroleum products.
The Mining sector remained the biggest contributor to producer price growth, rising 29.0%, although this was slower than the 52.6% increase recorded a month earlier. The increase was mainly driven by the 40.7% growth in crude petroleum extraction.
Meanwhile, the Agriculture, forestry and fishing sector rose 9.1%, slightly higher than May’s 8.9%, supported by stronger prices for fishing activities (12.5%) and perennial crops (10.8%).
Utility-related sectors also recorded notable increases, with Water supply rising 12.7% and Electricity and gas supply increasing 10.2%.
Producer prices edge higher month-on-month
On a monthly basis, the Producer Price Index increased 0.6% in June, easing from 1.1% growth in May.
Manufacturing continued to lead monthly gains, advancing 2.4%, primarily due to a 10.9% increase in refined petroleum products.
Water supply also increased 1.5% during the month.
However, the Mining sector declined 11.6% as crude petroleum extraction fell 13.7%, while Agriculture, forestry and fishing slipped 0.8%, weighed down by a 2.5% decline in fishing prices.
Electricity and gas supply remained unchanged from the previous month.
Intermediate goods record strongest increase
Across the stages of processing, Crude materials for further processing rose 25.0% year-on-year, although this moderated from 31.5% in May, driven mainly by non-food materials, which increased 29.8%.
The Intermediate materials, supplies and components index climbed 7.4%, supported by a 13.9% rise in processed fuels and lubricants, while Finished goods increased 2.0%, led by higher prices for capital equipment.
Compared with May, intermediate materials rose 2.4%, finished goods increased 0.7%, while crude materials declined 3.8%.
PPI rebounds in second quarter
For the second quarter of 2026, Malaysia’s Producer Price Index rebounded 7.4%, reversing the 1.7% contraction recorded in the first quarter.
The quarterly recovery was led by the Mining sector, which surged 44.8%, followed by Agriculture, forestry and fishing (6.8%) and Manufacturing (3.9%).
On a quarter-on-quarter basis, the PPI increased 6.8%, significantly higher than the 0.9% growth recorded in the first quarter, mainly supported by a 35.5% increase in mining producer prices.
The latest figures indicate that producer-level inflation strengthened considerably during the second quarter, driven largely by energy-related industries and higher manufacturing costs, particularly in petroleum-based products.
