Malaysia: Malaysia’s manufacturing industry capacity utilisation reached 81.8 per cent in the first quarter of 2025 (1Q 2025), increasing 1.0 percentage points from the 80.08 per cent recorded in the same quarter of the preceding year, said the Department of Statistics Malaysia (DOSM).

According to BERNAMA News Agency, chief statistician Datuk Seri Dr Mohd Uzir Mahidin stated that the capacity utilisation aligned with the manufacturing sector’s industrial production index performance, which saw a 4.2 per cent year-on-year increase during this quarter. Within this period, sub-sectors reported capacity utilisation above 80 per cent, with the non-metallic mineral products, basic metal, and fabricated metal products sub-sector achieving the highest rate at 85.2 per cent, marking a 2.3 percentage points rise. The textiles, wearing apparel, leather, and footwear sub-sector followed with a 2.5 percentage points increase, reaching 82.6 per cent.

On a quarter-on-quarter basis, Mohd Uzir noted a slight decline of 0.1 percentage points in the manufacturing industry’s capacity utilisation compared to 4Q 2024’s 81.9 per cent. The year-on-year increase was recorded monthly throughout 1Q 2025: January (81.8 per cent; +0.9 percentage points), February (81.2 per cent; +1.4 percentage points), and March (82.5 per cent; +0.8 percentage points).

Mohd Uzir reported that export-oriented industries experienced a capacity utilisation increase by 1.1 percentage points year-on-year, reaching 80.6 per cent from 79.5 per cent in 1Q 2024. Notably, the manufacture of furniture and machinery and equipment sub-sectors showed significant increases, with rates rising to 88.4 per cent and 85.9 per cent, respectively.

However, three industries recorded capacity utilisation below 80 per cent: the manufacture of vegetable and animal oils and fats (72.8 per cent), wood and products of wood and cork except furniture (75.4 per cent), and computer, electronics, and optical products (79.2 per cent). Compared to 4Q 2024, the export-oriented industries saw a marginal decline of 0.3 percentage points from 80.9 per cent in the previous quarter.

In the domestic-oriented capacity utilisation sector, a positive trend continued, albeit at a slower pace, with an increase of 0.9 percentage points to 84.5 per cent in 1Q 2025. Most industries in this segment reported higher utilisation rates, especially in the manufacture of fabricated metal products except machinery and equipment (+3.4 ppts; 86.6 per cent) and other non-metallic mineral products (+1.8 ppts; 87.3 per cent). However, the manufacture of motor vehicles, trailers, and semi-trailers saw a decline to 82.9 per cent, followed by the manufacture of paper and paper products at 77.9 per cent.

Mohd Uzir identified factors such as low demand, insufficient supply of materials, and machinery and equipment maintenance as primary causes of under-utilisation in the manufacturing industry. Compared to the last quarter, domestic-oriented industries’ capacity utilisation rose by 0.6 percentage points from 83.9 per cent.

He also highlighted that manufacturing industry capacity utilisation in seven states surpassed the national rate in 1Q 2025, with Wilayah Persekutuan Labuan leading at 98.5 per cent, followed by Terengganu (86.7 per cent), Johor (85.2 per cent), Pahang (84.5 per cent), Melaka (84.2 per cent), Selangor (83.6 per cent), and Negeri Sembilan (83.0 per cent). In contrast, Kelantan recorded the lowest capacity utilisation rate at 66.2 per cent, a decrease of 3.6 percentage points compared to the same quarter last year.