KUALA LUMPUR: Malaysia’s Industrial Production Index (IPI) expanded 6.3 per cent year-on-year in September, driven primarily by strong manufacturing output that propelled the sector’s monthly sales value to RM191.1 billion.
According to the latest figures released by the Statistics Department (DOSM), the September headline growth was underpinned by expansions in manufacturing and electricity generation, which offset continued weakness in mining.
The manufacturing output sector advanced 9.4 per cent year-on-year (August 2026: 7.4 per cent), while electricity generation surged 10.7 per cent (August 2026: 9.0 per cent).
Conversely, the mining sector contracted 9.4 per cent (August 2026: -7.4 per cent), dragged down by lower output in crude petroleum and condensate (-11.8 per cent) as well as natural gas (-7.9 per cent).
On a month-on-month comparison, the IPI rose 1.3 per cent (August 2026: 2.6 per cent), supported by a 2.9 per cent expansion in the manufacturing sector.
The growth momentum in manufacturing production was anchored by export-oriented industries, which expanded 10.7 per cent in September compared to 9.1 per cent in August.
This performance was led by the manufacture of computer, electronic, and optical products, which jumped 19.3 per cent, followed by the manufacture of vegetable and animal oils and fats at 7.9 per cent.
Domestic-oriented industries also gathered pace, rising 6.6 per cent year-on-year (August 2026: 3.9 per cent). Growth was lifted by the 10.6 per cent increase in the manufacture of motor vehicles, trailers, and semi-trailers as well as 10.2 per cent for basic metals.
Meanwhile, processed food products production growth saw an increase of 7.5 per cent in September compared with a year ago.
Reflecting the higher factory activity, the capacity utilisation rate of Malaysia’s manufacturing industry climbed to 84.9 per cent in September from 84.1 per cent in August.
High plant usage was bolstered by electrical and electronic products at 88.6 per cent, as well as petroleum, chemical, rubber, and plastic products at 81.7 per cent.
The manufacturing sector’s sales value in September surged 12.9 per cent year-on-year to RM191.1 billion, accelerating from a 9.9 per cent expansion (RM185.0 billion) recorded in August. Month-on-month, sales value grew by 3.3 per cent.
The sector engaged 2.45 million employees during the month, representing a 1.4 per cent increase from a year earlier. Total salaries and wages paid climbed 4.0 per cent to RM8.7 billion.
As a result, sales value per employee grew 11.3 per cent to RM78,082, while average monthly salaries per employee rose 2.6 per cent to RM3,568.
For the third quarter of 2026 (Q3 2026), the IPI maintained a solid trajectory, advancing 5.3 per cent year-on-year (Q2 2026: 7.7 per cent) and expanding 4.3 per cent quarter-on-quarter.
Growth during the quarter was anchored by manufacturing (7.8 per cent) and electricity (8.3 per cent), which cushioned a 6.7 per cent contraction in mining.
Manufacturing sales value for Q3 2026 grew 10.7 per cent year-on-year to RM553.5 billion (Q2 2026: 9.3 per cent; RM524.8 billion), logging a 5.5 per cent quarter-on-quarter increase.
The sector’s quarterly wage bill stood at RM25.8 billion—up 3.4 per cent—with sales value per employee rising 9.1 per cent to RM226,091 and average monthly salaries advancing 2.0 per cent to RM3,517.
Cumulatively, for the first nine months ended September 2026, Malaysia’s overall IPI registered a growth of 5.7 per cent, significantly outpacing the 2.9 per cent growth recorded in the corresponding period of 2025.
Over the same nine-month period, manufacturing sales value reached RM1.58 trillion, up 8.5 per cent compared to 3.6 per cent growth in January–September 2025, while total salaries and wages paid reached RM77.4 billion, reflecting an increase of 2.9 per cent.