KUALA LUMPUR, Jan. 5 (Xinhua) -- Malaysia's manufacturing sector showed signs of stabilization despite lingering uncertainty from higher U.S. tariffs, as S&P purchasing managers' index (PMI) readings pointed to broadly steady operating conditions toward the end of 2025, economists said Monday.
Kenanga Research said in a note that it sees Malaysia's manufacturing sector as steady despite U.S. tariffs, supported by Malaysia's diversified export base.
According to the research house, the latest PMI readings point to broadly stable operating conditions even as tariff-related uncertainties persist.
It noted export-oriented sectors have cushioned weaker U.S.-bound shipments by redirecting goods to alternative markets.
However, caution remains as the delayed impact of higher U.S. tariffs could weigh on orders after the festive period.
"Even so, Malaysia's electrical and electronics products sector is expected to stay resilient given its exemption from higher tariffs, while domestic-oriented industries are set to benefit from household spending, ongoing fiscal support under Budget 2026, and initiatives under the 13th Malaysia Plan," it said.
MBSB Research also said in a note that overall manufacturing sentiment in Malaysia remained positive.
Although business optimism eased from the previous month's 12-year high, the research house noted that the sector is still supported by recovering demand conditions and improved production growth.
"Malaysia's overall growth should remain supported by the robust PMI, signaling a continued uptrend in industrial production growth," it added.
TA Securities said on Monday that the PMI averaged 49.4 for 2025, indicating that the manufacturing sector was in the early phase of recovery, with clearer signs of stabilization emerging toward year-end.
"Overall, the sector is expected to expand at a gradual, rather than abrupt, pace in early 2026," said the research house. ■
