Manufacturing utilisation climbs to 83.7pct in Q2

In the second quarter of 2026, Malaysia's manufacturing capacity utilisation increased to 83.7 percent, marking a rise of 1.2 percentage points compared to the previous year. The Statistics Department reported that all manufacturing sub-sectors observed capacity utilisation rates exceeding 80 percent during the quarter, with transport equipment and other manufacturers achieving the highest rate at 87.2 percent, a 1.2 percentage point increase year-on-year.

Electrical and electronics products followed with an 85.3 percent rate, up 2.6 percentage points. Capacity utilisation also improved throughout the quarter, climbing from 82.9 percent in April to 84.5 percent in June. Overall, manufacturing capacity utilisation increased by 0.9 percentage points from 82.8 percent in the first quarter.

Export-oriented industries showed the most significant growth, with a 1.3 percentage point rise to 82.9 percent, primarily driven by the production of computer, electronics, and optical products, which surged 3.5 percentage points to 84.9 percent. The manufacture of plastic products also increased by 0.6 percentage points to 81.5 percent.

However, capacity utilisation remained below 80 percent in the manufacture of wood and wood products, articles of straw and plaiting materials, textiles, and vegetable and animal oils and fats. Domestic-oriented industries saw a 0.8 percentage point increase in capacity utilisation to 85.2 percent, with motor vehicles, trailers, and semi-trailers leading at 90.9 percent, followed by basic metals at 81.4 percent.

The manufacture of paper and paper products had the lowest rate at 77.1 percent. Nine states and federal territories recorded capacity utilisation above the national average, with Labuan leading at 96.2 percent, followed by Melaka at 89.1 percent, Selangor at 86.9 percent, Pahang at 85.6 percent, Terengganu at 85.5 percent, Johor at 85.1 percent, Kedah at 85 percent, Negeri Sembilan at 84.6 percent, and Sabah at 84.1 percent.

Perlis had the lowest rate at 57.8 percent. The department attributed underutilisation of manufacturing capacity to low demand, insufficient material supply, and machinery and equipment repair and maintenance.