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Malaysia’s manufacturing PMI rose marginally to 48.7 in January 2025 from 48.6 in December 2024, marking the eighth consecutive month of contraction. Factory output declined sharply, new orders continued to fall, and employment shrank for the fourth straight month. Supply chain disruptions, including port congestion and material shortages, led to longer delivery times. Input costs rose, but output prices were lowered to stimulate demand.
Despite weakening business sentiment, optimism persists for a demand recovery. Malaysia’s manufacturing outlook remains positive, supported by domestic spending, rising wages, and the global tech upcycle. However, external demand faces risks from escalating global trade tensions. Regionally, Indonesia and South Korea saw manufacturing expansion, while Japan and Thailand experienced contractions.
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