MALAYSIA could face a deepening industrial and economic squeeze within weeks as companies begin exhausting existing stockpiles of raw materials amid prolonged global supply chain disruptions, according to a senior economist at the Prime Minister’s Office.
Prime Minister’s Office Senior Director of Economics and Finance Nurhisham Hussein warned that June and July are expected to become critical months for manufacturers and businesses as replacement supplies remain delayed by worsening global logistical and energy disruptions.
He said many firms are currently surviving on previously accumulated inventory, masking the true severity of the crisis, but cautioned that the situation would become far more visible once those reserves run dry.
“Many businesses are still relying on existing old stock. However, by the middle of the year, those inventories are expected to be depleted while new supplies have yet to arrive,” he said in an interview on a BFM podcast.
Nurhisham said the crisis was unfolding through several overlapping economic waves that would increasingly affect domestic industries over the coming months.
The first wave involves fuel shortages and surging energy prices, which are already increasing operational and logistics costs for businesses.
The second phase, he said, would emerge when industries begin running short of essential feedstock materials for the petrochemical sector, disrupting production across a broad range of manufacturing activities.
According to Nurhisham, discussions with companies over recent months revealed that many large firms only possessed sufficient raw material reserves for roughly two months beginning from mid-March.
“After that period, companies need to secure new supplies, but ongoing disruptions to global supply chains are making the process increasingly difficult,” he said.
He also pointed to a recent survey published by the Federation of Malaysian Manufacturers in mid-April, which showed that while larger corporations remained relatively stable, small and medium-sized enterprises were already facing mounting pressure.
Some SMEs, he said, were reported to have only one to two weeks of remaining supplies, leaving smaller businesses especially vulnerable to shipping delays and rising operating costs.
As a result, Nurhisham warned that the full economic consequences of supply shortages could begin emerging this month, with more factories and manufacturers potentially forced to suspend operations temporarily due to a lack of raw materials.
He said the disruptions could gradually trigger reductions in overtime work, fewer employee shifts and declining productivity across multiple sectors.
“It is not something that happens suddenly, but rather a slow process that eventually places pressure on jobs, workers’ incomes and overall economic growth,” he said.
Nurhisham added that recovery in global oil supplies would likely remain prolonged even if conflict in West Asia ended in the near future.
He explained that oil production infrastructure in the region could not simply resume operations immediately, as oilfields require carefully managed restoration processes before full production capacity can return.
“Even if the war were to end tomorrow, around three-quarters of oil production in West Asia still could not be channelled back into the market for at least three months,” he said.
He also highlighted severe shipping congestion in the Strait of Hormuz as a major obstacle to restoring global energy supply chains, with thousands of vessels stranded or delayed along one of the world’s most strategically important maritime routes.
According to Nurhisham, the process of reorganising shipping traffic and clearing vessels from the area could itself require an additional two to three months.
“Even when oil wells are reopened, production cannot immediately be increased drastically because pressure within the system must be rebuilt slowly and carefully.
“The entire process from reopening operations until supply stabilises again could take around six months, and that does not yet include the delivery period for oil to international markets,” he said.
He warned that genuine normalisation of global oil supplies had yet to begin because the regional conflict remained unresolved.
“Recovery has not actually started because the war is still ongoing. Based on current projections, oil supply may only return to normal towards the end of this year or possibly continue into 2027,” he said. - May 18, 2026
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