Malaysia's manufacturing activity remained in contraction in May but at a softer pace than the previous month, S&P Global said in a report Tuesday.

The seasonally adjusted S&P Global Malaysia Manufacturing Purchasing Managers' Index edged up to 48.8 in May from 48.6 in April, remaining below the 50 mark that separates contraction from expansion.

Firms saw a continued softening in production and new orders during the month. Manufacturers have cut output for a year, though the latest reduction was the smallest in three months.

Employment was unchanged midway through the second quarter. Firms also scaled back purchasing activity during May.

On the price front, new US tariffs increased cost pressures for manufacturers, pushing input price inflation to a six-month high, S&P said.

Looking ahead, the optimism of Malaysian manufacturers weakened to its lowest level since June 2021.