FX.co ★ Malaysia Manufacturing PMI Edges Higher

The S&P Global Malaysia Manufacturing PMI edged up to 48.8 in May 2025, a modest improvement from April’s four-month low of 48.6. Despite this increase, the index remained below the critical 50-mark for the 12th consecutive month, indicating a prolonged contraction in manufacturing activity. Both production and new orders decreased at their slowest rate in three months, while new export orders fell for the sixth month in a row, albeit at the slowest pace since February. Employment levels stayed unchanged, halting a seven-month trend of job reductions. Backlogs reduced slightly as companies continued to process outstanding orders, and purchasing activity was scaled back, although at a slower rate than seen in recent months. Supplier performance saw its first improvement since April 2024, mainly due to subdued input demand. In terms of pricing, input cost inflation surged to a six-month high, driven by newly imposed US tariffs that increased expenses. Business confidence weakened, dropping to its lowest point since June 2021, with firms expressing worries over US trade policies and persistent labor shortages.