Manufacturing Sector To Sustain Growth On Resilient Domestic Demand, Supply Chain Recovery -- PIVB

KUALA LUMPUR, Feb 4 (Bernama) -- Malaysia's manufacturing sector is expected to sustain positive growth, supported by resilient domestic demand and gradual improvements in supply chain conditions, according to Public Investment Bank Bhd (PIVB).

However, it said downside risks to external demand remain elevated, particularly in second half of 2025, as subdued global growth prospects and escalating geopolitical tensions weigh on export-oriented industries.

“Heightened uncertainty surrounding global trade policies, especially following President Donald Trump's policy stance, could add further pressure on industrial activity.

“Despite these challenges, steady domestic consumption, fiscal measures supporting investment, and a gradual recovery in key trading partners may help mitigate external headwinds,” it said in a research note.

PIVB said Malaysia’s manufacturing sector remained under pressure at the start of 2025, with firms reporting continued moderations in both production and new orders.

Citing S&P Global, the investment bank mentioned that manufacturers, responding to subdued demand, have cut selling prices for the first time since June 2023, with the decline, albeit modest, marked the sharpest reduction since January 2015.

Meanwhile, PIVB said the global manufacturing purchasing managers index (PMI) edged up to 50.1 in January 2025, compared to 49.6 in December 2024, marking the first expansion in seven months.

“The ASEAN manufacturing PMI remained stable at 50.4 (December 2024: 50.7), staying above the neutral 50.0 threshold. Malaysia’s PMI inched higher to 48.7 (December 2024: 48.6), though still in contractionary territory.

“Thailand’s PMI fell to 49.6 (December 2024: 51.4), indicating a deterioration in manufacturing conditions and the first contraction since April 2024.

“Other ASEAN economies stayed above the 50.0 mark, with Indonesia’s PMI rising to 51.9 (December 2024: 51.2), highest since May 2024; the Philippines eased to 52.3 (December 2024: 54.3), following a 32-month high in December,” it said.

-- BERNAMA