Analysts said the next reading for Malaysia’s manufacturing sector will be closely watched as a key indicator of economic resilience, although August data showed a tentative improvement.
This is partly because the August data has yet to fully reflect the impact of the United States (US) tariff revisions that took effect earlier that month, as well as a weaker year-to-date performance compared to 2024.
Latest data from S&P Global showed the Malaysian manufacturing Purchasing Managers’ Index (PMI) rose to 49.9 in August, a 14-month high from 49.7 in July, supported by an increase in new orders.
However, the recovery was also weighed down by low business confidence and a subdued employment rate.
BIMB Securities said the increase could be influenced by forward activity ahead of the 19% US tariff hike on August 1, while warning of the risk of slower momentum in the second half of the year.
The firm said strong domestic demand, trade diversification and ‘China+1’ investment could potentially provide additional buffers.
TA Securities stressed that the September PMI reading is crucial as it reflects the true impact of the US tariff hike.
