Malaysia’s Manufacturing PMI Reaches 20-Month High in Strong Start to 2026
Malaysia’s manufacturing sector kicked off 2026 with renewed momentum as the Purchasing Managers’ Index (PMI) climbed to 50.2 in January, its highest level in 20 months. The improvement from December’s 50.1 marks the third consecutive month of expansion, pointing to gradually strengthening conditions across the sector.
Data released by S&P Global showed that the uptick was largely driven by a return to output growth and stabilising new factory orders. Firmer external demand also helped support the recovery, signalling improving global trade conditions for Malaysian manufacturers.
A stronger ringgit provided further relief, contributing to the first drop in input costs since May 2020. At the same time, output price inflation remained moderate, helping ease pressure on producers and customers alike.
According to Maryam Baluch, the latest PMI reading reflects a sustained improvement in business conditions.
“Output has returned to growth, demand conditions are stable, and business confidence is among the highest recorded in the history of this survey,” she noted.
Baluch added that easing inflationary pressures could help maintain growth momentum in the months ahead, offering manufacturers a more supportive operating environment.
Regional Outlook Also Improves
Across the region, the ASEAN manufacturing PMI edged up to 52.8 in January, slightly higher than December’s 52.7. The rise was supported by solid gains in both output and new orders.
Business sentiment across Southeast Asia climbed to its strongest level since April 2023. However, early signs of renewed inflationary pressure have begun to surface.
Baluch warned that while rising capacity pressures could lead to faster job creation, increasing input costs and output charges may pose risks to future growth if inflation accelerates. She stressed the importance of closely monitoring price trends in the coming months.
Overall, Malaysia’s latest PMI figures signal a steady and cautiously optimistic recovery in manufacturing, supported by stronger demand, improving cost conditions, and elevated business confidence heading into 2026.
