Malaysia’s S&P Global Manufacturing PMI rose to 50.7 in March 2026 from 49.3 in February, marking the highest level since April 2022. Output rose at the fastest pace since December 2021, supported by improved demand conditions and new tender wins. Employment increased as well, ending two months of job cuts, while firms reduced backlogs, reversing February’s slight accumulation. However, new orders moderated for the second straight month, and international demand softened for the first time in three months, prompting firms to cut purchasing activity for the first time in nine months. Input cost inflation increased to its highest level since October 2024, driven by higher transport, energy, and material costs amid the Middle East conflict, while output price inflation hit a 45-month high and was stronger than the historical average. Lastly, business sentiment for the year-ahead outlook weakened further to a seven-month low.