Malaysia’s Industrial Production Index Grows by 5.3% in July 2024

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Malaysia’s Industrial Production Index (IPI) expanded by 5.3% in July 2024, driven by robust growth in the manufacturing and electricity sectors. This marked a slight acceleration from the 5.0% growth recorded in June 2024, according to Chief Statistician Malaysia Datuk Seri Dr Mohd Uzir Mahidin.

Manufacturing and Electricity Sectors Drive Growth

The manufacturing sector saw a strong increase in output, rising by 7.7% in July, up from 5.2% in June 2024. The electricity sector also showed significant growth, expanding by 7.0% compared to 3.5% in the previous month. However, the mining sector faced a setback, with production declining by 5.0%, contrasting with the 4.9% growth registered in June.

On a month-to-month basis, the IPI experienced a slight dip, decreasing by 1.5% compared to the 4.8% growth recorded in June.

Domestic Industries Show Strong Performance

Both export-oriented and domestic-oriented industries performed well in July. Export-oriented industries recorded 7.8% growth, up from 5.4% in June, while domestic-oriented industries grew by 7.5%, a notable increase from 4.6% the previous month.

Key drivers of export-oriented growth included:

• Manufacture of vegetable & animal oils & fats, which surged by 21.9% (June 2024: 11.0%)
• Manufacture of computer, electronics & optical products, growing by 5.0% (June 2024: 4.9%)
• Manufacture of coke & refined petroleum products, which continued strong with an 11.7% increase (June 2024: 12.5%)

The growth in export-oriented industries mirrored the 10.6% increase in Malaysia’s export of manufactured goods for July 2024. However, on a month-to-month basis, export-oriented industries fell by 3.3%, down from the 11.8% growth seen in June.

Domestic-Oriented Industries Recovering

The domestic-oriented industries saw a rebound, led by:

• Manufacture of other non-metallic mineral products, which grew by 12.2%
• Manufacture of basic metals, rising by 10.5%
• Manufacture of motor vehicles, trailers & semi-trailers, which recovered with 3.9% growth, rebounding from the -10.7% contraction in June

Month-on-month, the domestic industries grew by 1.0%, a positive shift from the -5.4% decline in June.

Strong Performance for January-July 2024

For the first seven months of 2024, the IPI increased by 4.1%, a notable improvement from the 1.1% growth recorded during the same period in 2023. All sectors posted gains, including:

• Mining index, which rose by 2.9%
• Manufacturing index, up by 4.1%
• Electricity index, which saw the strongest growth, increasing by 7.1%

Malaysia’s IPI growth in July 2024 highlights the country’s continued industrial recovery, especially in the manufacturing sector, which remains the key driver of the economy. With both export- and domestic-oriented industries performing well, Malaysia is poised for sustained growth, despite the challenges faced by the mining sector.