Malaysia manufacturing PMI falls to 49.5 in October, lowest in four months

Investing.com -- Malaysia’s manufacturing sector conditions softened at the start of the final quarter of 2025, with the S&P Global Malaysia Manufacturing Purchasing Managers’ Index (PMI) falling to 49.5 in October from 49.8 in September.

The latest reading, which came in marginally below the neutral 50.0 threshold, marked a four-month low for the index, indicating further moderation in business conditions.

New orders declined for the first time in three months, though only fractionally, as firms reported weak market activity and subdued client confidence. New export orders fell at the steepest rate since April, with manufacturers citing muted sales particularly to Asia-Pacific and Africa regions.

Production levels were scaled back at a more pronounced rate in October as companies responded to lower order volumes. The reduction rate was mild but represented the steepest decline in five months.

Employment decreased marginally, marking the fourth consecutive month of workforce reduction. Despite this, manufacturers were able to reduce backlogs of work at the sharpest pace since February due to moderated demand.

On the price front, input cost inflation strengthened slightly from September but remained modest overall. Firms chose to lower their selling prices for the first time in six months in an attempt to stimulate sales.

Supply chain pressures continued as supplier delivery times lengthened for the second consecutive month, with companies reporting shipping delays and material shortages.

Despite the challenging conditions, business confidence improved significantly, reaching its highest level since April 2023. Manufacturers expressed optimism that new orders would expand in the coming year, leading to higher output.

According to S&P Global, the latest PMI reading suggests that both GDP and official manufacturing production increased solidly on an annual basis at the start of the final quarter of the year, based on historical relationships between PMI data and official output figures.

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