KUALA LUMPUR (March 3): Malaysia’s manufacturing sector conditions improved marginally in February, as firms reduced purchasing activity to a lesser extent than seen a month earlier to meet rising orders, latest data showed.

The seasonally adjusted manufacturing purchasing managers index (PMI) was 49.7 in February, up from 48.7 in January, according to S&P Global that compiles the gauge. The index was at its highest since August 2024, but remained in contraction territory since May 2024.  

A reading above 50 points indicates activity expansion, while a reading below 50 points to contraction in the sector.

February data indicated improvements though “conditions remained generally challenging,” Usamah Bhatti, an economist at S&P Global, commented on the latest reading. “Most encouragingly, firms were able to secure greater volumes of new work for the first time in four months.”

The latest PMI reading indicates “modest growth” in first-quarter gross domestic product (GDP) and sustains the trend seen in the third and fourth quarters of last year, S&P noted. The data also suggest that the expansion in manufacturing production continued into 2025.

“The outlook for the coming months appears brighter, as firms are hopeful that the renewed increase in new orders will be sustained and accelerate, leading to an eventual recovery in production levels,” Bhatti added.

Firms surveyed by S&P, however, remained optimistic and were the most positive in four months, as they expected new order growth to be sustained over the coming year.