Even with a recent ceasefire in the Middle East, the surge in raw material, energy, and shipping costs — compounded by US tariff measures — continues to squeeze manufacturers, driving factories across Southeast Asia to close and shed jobs.

While strong production in electronics has helped keep headline economic indicators looking relatively resilient, economists and industry leaders warn that deeper stress is spreading through small and medium-sized enterprises across the region.

The manufacturing confidence across Association of Southeast Asian Nations, or ASEAN, remained in positive territory in April, according to S&P Global's Purchasing Managers' Index, but the figure fell to its lowest level in nine months and marked a sharp slowdown from the period before the Iran war.

Firdaos Rosli, chief economist at AmBank in Kuala Lumpur, said Malaysia's April trade figures appeared stronger than expected, with exports growing at a double-digit rate. However, he warned that the headline numbers concealed major differences between sectors.

Rosli said the strength of overall data was masking severe pressure in some businesses, particularly as different parts of the economy were moving at very different speeds.