Malaysia’s manufacturing industry capacity utilisation reached 81.8% in the first quarter of 2025 (1Q 2025), increasing one percentage point from the previous 80.08% recorded in 1Q 2024, which is in line with the performance of the sector’s industrial production index that increased 4.2% year-on-year (YoY) during this quarter.
“In 1Q 2025, sub-sectors posted capacity utilisation above 80%, with the highest rate recorded by non-metallic mineral products, basic metal and fabricated metal products sub-sector at 85.2% which increased by 2.3 percentage points (ppts).
“This was followed by the increased 2.5 ppts in textiles, wearing apparel, leather and footwear to a rate of 82.6%,” said Department of Statistics Malaysia (DOSM) chief statistician Datuk Seri Dr Mohd Uzir Mahidin.
On a quarter-to-quarter (QoQ) comparison, Mohd Uzir said the manufacturing industry’s capacity utilisation recorded a mild decline of 0.1 ppts compared to 4Q 2024’s 81.9%.
“The YoY increase in monthly capacity utilisation performance was recorded throughout 1Q 2025, which was January (81.8%; +0.9 ppts), February (81.2%; +1.4 ppts) and March (82.5%; +0.8 ppts),” Mohd Uzir said, adding that the capacity utilisation in the export-oriented industries also increased during this quarter by 1.1 ppts YoY to 80.6% from 79.5% recorded in 1Q 2024.
He also pointed out that the highest rate resulted in the manufacture of furniture along with machinery and equipment sub-sectors, which increased by 0.4 ppts to 88.4% and by 2.2 ppts to 85.9%, respectively.
However, he mentioned that three industries recorded capacity utilisation below 80%, namely the manufacture of vegetable and animal oils and fats (72.8%), the manufacture of wood and wood products (except furniture), the manufacture of straw articles and plaiting materials (75.4%) and the manufacture of computer, electronics and optical products (79.2%).
Compared to 4Q 2024, Mohd Uzir said that the capacity utilisation rate of the export-oriented industries declined marginally by 0.3 ppts from 80.9% in the preceding quarter.
Additionally, he said that the domestic-oriented capacity utilisation industries remained positive, albeit at a slower rate of 0.9 ppts to 84.5% in 1Q 2025.
“Most of the industries in this segment posted the higher utilisation rates, particularly in the manufacture of fabricated metal products, except machinery and equipment (+3.4 ppts; 86.6%) and the manufacture of other non-metallic mineral products (+1.8 ppts; 87.3%).
“Nevertheless, the manufacture of motor vehicles, trailers and semi-trailers recorded a decline to register a rate of 82.9%, followed by the manufacture of paper and paper products industry with 77.9%,” he noted.
Factors such as low demand, insufficient supply of materials as well as the repair and maintenance of machinery and equipment remained the main cause of the under-utilisation of capacity in the manufacturing industry.
Compared to the previous quarter, Mohd Uzir said that the capacity utilisation in the domestic-oriented industries was up by 0.6 ppts from 83.9%.
Furthermore, the manufacturing industry capacity utilisation for seven states surpassed the national rate in the first quarter of 2025, namely Wilayah Persekutuan Labuan (98.5%), Terengganu (86.7%), Johor (85.2%), Pahang (84.5%), Melaka (84.2%), Selangor (83.6%) and Negeri Sembilan (83%).
The lowest capacity utilisation rate posted by Kelantan with 66.2% (-3.6 ppts) compared to the same quarter last year.
Source: https://sme.asia/manufacturing-capacity-utilisation-hits-81-8-in-1q-2025/