Malaysian manufacturing industry’s capacity utilisation rises to 82.1% in Q2

PETALING JAYA: The manufacturing industry operated at a capacity utilisation of 82.1% in the second quarter of 2024 (Q2’24), according to the Department of Statistics Malaysia.

Chief Statistician Malaysia Datuk Seri Mohd Uzir Mahidin said: “The capacity utilisation of the manufacturing industry was 82.1% in the second quarter of 2024, which increased by 3.8 percentage points compared to the same quarter of the preceding year (Q2’23: 78.3%). In this quarter, all sub-sectors posted capacity utilisation above 80%, with the highest rate recorded by the transport equipment and other manufacturers sub-sector at 86.0%; followed by textiles, wearing apparel, leather and footwear (82.8%); and non-metallic mineral products, basic metal and fabricated metal products (82.3%).”

In comparison with the previous quarter, the capacity utilisation of the manufacturing industry rose by 1.3 percentage points (Q1’24: 80.8%).

“The higher capacity utilisation rate was also reflected in the expansion of the Industrial Production Index for the manufacturing industry by 4.9% compared to a year ago,” said Mohd Uzir.

The year-on-year increase in capacity utilisation was recorded throughout the second quarter of 2024, which was April (80.3%, +3.8 percentage points), May (82.7%, +3.5 percentage points) and June (83.2%, +4 percentage points) with May and June posting the highest rate sinces January 2023. In addition, factors such as low demand; insufficient supply of materials; and the repair and maintenance of machinery and equipment remained as the main cause of the underutilisation of capacity in the manufacturing industry.

Mohd Uzir said the capacity utilisation in export-oriented industries increased by 3.9 percentage points to 81.3% (Q2’23: 77.4%).

“The manufacture of machinery and equipment n.e.c. registered the highest rate at 88.5%, followed by the manufactured of furniture (85.8%). However, two industries recorded the capacity utilisation below 80% namely manufacture of vegetable and animal oils and fats (75.4%); and manufacture of wood and products of wood and cork, except furniture;

manufacture of articles of straw and plaiting materials (74.8%). In comparison with the previous quarter, the capacity utilisation rate of the export-oriented industries rose by 1.8 percentage points from 79.5%,” he added.

In the meantime, the capacity utilisation in domestic-oriented industries expanded by 3.4 percentage points to 83.7%. Three industries in this segment posted a capacity utilisation rate above 85%, namely the manufacture of tobacco products (94.7%); the manufacture of motor vehicles, trailers and semi-trailers (88.3%); and the manufacture of basic pharmaceutical, medicinal chemical and botanical products (85.6%).

Conversely, the lowest capacity utilisation rate was posted by the manufacture of paper and paper products industry with 77.1%. Compared to the first quarter of 2024, the capacity utilisation in the domestic-oriented industries went up by 0.1 percentage points from 83.6%.

The manufacturing industry capacity utilisation for seven states surpassed the national rate in the second quarter of 2024, namely WP Labuan (94.3%), Terengganu (84.8%), Pahang (84.7%), Selangor (84.6%), Negeri Sembilan (84.4%), Malacca (83.5%), and Johor (83.3%). Nearly all states registered a year-on-year increase in the capacity utilisation rate, except for Terengganu and Kelantan.