Malaysia's September IPI climbs 6.3pct as manufacturing sales hit RM191bil

In September, Malaysia's Industrial Production Index (IPI) experienced a 6.3% increase compared to the same period last year, driven mainly by robust manufacturing output. The manufacturing sector's sales value reached RM191.1 billion, marking a 12.9% rise year-on-year. This surge was primarily fueled by export-oriented industries, which expanded by 10.7% in September, led by the manufacture of computer, electronic, and optical products, which jumped by 19.3%, followed by vegetable and animal oils and fats at 7.9%.

Domestic-oriented industries also saw growth, rising by 6.6% year-on-year, driven by a 10.6% increase in motor vehicles, trailers, and semi-trailers production, as well as a 10.2% growth in basic metals. Conversely, the mining sector contracted by 9.4% year-on-year, primarily due to lower output in crude petroleum and condensate (-11.8%) and natural gas (-7.9%).

Despite this, the mining sector's decline was offset by the strong performance in manufacturing and electricity generation, which expanded by 9.4% and 10.7% respectively, compared to previous years. The capacity utilisation rate of Malaysia's manufacturing industry increased to 84.9% in September, up from 84.1% in August, indicating high plant usage.

The manufacturing sector employed 2.45 million people in September, a 1.4% increase from the previous year, with total salaries and wages paid rising by 4.0% to RM8.7 billion. This resulted in sales value per employee growing by 11.3% to RM78,082, while average monthly salaries per employee increased by 2.6% to RM3,568. For the third quarter of 2026, the IPI continued its upward trend, expanding 5.3% year-on-year, aided by manufacturing (7.8%) and electricity (8.3%) sectors, which offset a 6.7% contraction in mining.

Manufacturing sales value for Q3 2026 grew by 10.7% year-on-year to RM553.5 billion, while the quarterly wage bill stood at RM25.8 billion, reflecting a 3.4% increase.