2026.06.0200:35:20UTC+00Malaysia Manufacturing Shrinks for 1st Time in 3 Months

Malaysia’s S&P Global Manufacturing PMI fell to 49.0 in May 2026 from April’s four-year high of 51.6, signaling the first contraction in activity since February and the weakest reading in three months. The decline reflected softer new orders and output amid subdued demand. New export orders also weakened for a third straight month, registering their sharpest decline since last October.

With output growth moderating, firms halted hiring, although purchasing activity rose for a second consecutive month. This increase was largely driven by efforts to hedge against anticipated raw material price increases and to build buffer stocks in response to the ongoing conflict in the Middle East.

On the cost front, input prices continued to rise, fueled by higher raw material and fuel costs, though overall input cost inflation eased from April’s recent peak. Output price inflation also moderated as firms focused on maintaining competitiveness. Despite the softer conditions, business confidence improved for the first time in four months, reaching its highest level since February.