KUALA LUMPUR, 1 July — Malaysia’s manufacturers faced growing cost pressures in June, with input prices rising at the fastest pace in seven months.

The S&P Global Malaysia Manufacturing PMI ticked up to 49.3, signalling a softer moderation in business activity.

While the index remained below the neutral 50.0 level, it marked the sector’s strongest performance since February.

"June data indicated a gradual move to stabilisation in the health of the Malaysian manufacturing sector, although operating conditions remained challenging,” Usamah Bhatti, economist at S&P Global Market Intelligence, said.

"Firms recorded sustained, albeit softer moderations in demand and production that were the softest in four months.”

However, manufacturers cited higher raw material costs and an unfavourable exchange rate as key reasons behind the rise in input costs.

In response, firms raised selling prices for the first time in half a year, with output charges rising the most since August 2024.

The inflationary pressures came despite a continued softening in both output and new order volumes.

Export demand also fell, but at the slowest rate since the downturn began in December, slightly easing the overall sales decline.

Staffing levels rose marginally, ending a nine-month stretch of job cuts in the manufacturing sector.

Inventories of finished goods were further drawn down, indicating that businesses remained cautious about future demand.

Purchasing activity remained weak, extending a decline that has lasted for nearly three years.

Supplier delivery times lengthened for the first time in three months, adding to concerns about supply chain stability.

Firms remained modestly optimistic about future output, banking on new product launches despite global economic headwinds.