Malaysia’s manufacturing sector sees slight improvement in July

KUALA LUMPUR, Aug 3 — Malaysia’s factory conditions showed modest improvement in July as new orders continued to rise, according to the latest S&P Global Manufacturing Purchasing Managers’ Index (PMI). The seasonally adjusted PMI held steady at 50.7, unchanged from June, signalling mild expansion in activity.

S&P Global economist Maryam Baluch said price pressures had eased, with input costs and selling prices increasing at their slowest pace in five months. The firm noted that the continued strengthening in business conditions suggests official data for the third quarter may reflect “solid expansions” in both GDP and manufacturing output.

Malaysia’s economy grew 5.8 per cent in the second quarter, supported by stronger electronics demand and a rebound in mining production. However, business inflation has climbed to its fastest pace in four years due to higher energy costs.

Despite the uptick in orders, overall momentum remained limited. Output rose only slightly, employment fell, and business confidence weakened amid geopolitical tensions — particularly the ongoing conflict in the Middle East — which continued to weigh on sentiment. S&P Global reported that manufacturers’ expectations for future production remained historically subdued, with July marking the weakest confidence level in three months.

Some firms anticipated firmer demand, new contracts and product launches to support future growth, but many remained cautious due to soft market conditions and global uncertainties.