Kuala lumpur: Malaysia's manufacturing purchasing managers' index (PMI) rose to 51.6 in April 2026, indicating a firm near-term outlook primarily driven by precautionary stockpiling rather than strong end-demand, as reported by Kenanga Investment Bank Bhd.

According to BERNAMA News Agency, despite the positive PMI figures, the sector faces challenges due to persistently high logistics, energy, and material costs, coupled with worsening delivery delays. These issues are exacerbated by second-round effects from prolonged tensions in West Asia.

The investment bank highlighted that the manufacturing PMI expanded to 51.6 in April, up from 50.7 in March, marking the highest reading in four years. This expansion reflects a cautiously optimistic outlook for Malaysia's manufacturing sector.

On the matter of gross domestic product, Kenanga Investment Bank maintained its 2026 growth forecast at 4.5 percent, anticipating robust growth in the first half of the year. This growth is expected to be supported by festive-boost demand, resilient domestic demand, and stockpiling activities.

However, the bank warned of rising downside risks in the second half of 2026 due to escalating cost pressures and supply chain disruptions. Despite these challenges, domestic resilience is expected to mitigate the adverse impacts on the economy.