KUALA LUMPUR, Nov. 2 -- Malaysian factories are wrestling with mounting transport and material bills, passing these higher overheads directly to buyers as factory-gate inflation matches rising production costs.

According to the latest S&P Global Malaysia Manufacturing Purchasing Managers' Index (PMI), input expenses and selling charges rose at identical, accelerated rates in October. Survey respondents pinned the surge in freight and raw material expenses partly on ongoing conflict in the Middle East.

Despite intensifying cost burdens, overall sector performance returned to expansion territory. The headline PMI climbed to 51.0 in October from 49.9 in September, crossing the 50-point threshold separating contraction from growth to mark i...